Glacier Media Inc. (TSX: GVC) (“Glacier” or the “Company”) reported
revenue and earnings for the period ended March 31, 2023.
SUMMARY RESULTS
(thousands of dollars) |
|
Three months ended
March 31, |
except share and per share amounts |
|
|
2023 |
|
|
|
2022 |
|
|
|
|
|
|
Revenue |
|
$ |
39,218 |
|
|
$ |
42,232 |
|
EBITDA
(1) |
|
$ |
(2,241 |
) |
|
$ |
2,240 |
|
EBITDA (1)
margin |
|
|
(5.7 |
%) |
|
|
5.3 |
% |
EBITDA (1)
per share |
|
$ |
(0.02 |
) |
|
$ |
0.02 |
|
Capital
expenditures |
|
$ |
1,077 |
|
|
$ |
1,092 |
|
Net loss
attributable to common shareholder |
|
$ |
(5,217 |
) |
|
$ |
(666 |
) |
Net loss
attributable to common shareholder per share |
|
$ |
(0.04 |
) |
|
$ |
(0.01 |
) |
|
|
|
|
|
Weighted average shares outstanding, net |
|
|
132,329,984 |
|
|
|
132,755,559 |
|
|
|
|
|
|
(1) EBITDA is considered a non-GAAP
measure. Refer to “EBITDA Reconciliation” below for a
reconciliation of the Company’s net (loss) income attributable to
common shareholders as reported under IFRS to EBITDA.
2023 OPERATING PERFORMANCE AND
OUTLOOK
Operating Performance
Consolidated revenue for the period ended March
31, 2023, was $39.2 million, down $3.0 million or 7.1% from the
same period in the prior year. Consolidated EBITDA for the period
was a loss of $2.2 million, down $4.5 million from positive EBITDA
of $2.2 million for the same period in the prior year. During the
first quarter, the Company completed two separate transactions that
resulted in three operations being accounted for as joint ventures,
compared to previously included in the consolidated results. The
Company completed the sale of its printing assets into two new
joint venture operations. Certain print community media operations
were treated as joint ventures from January 1, 2023, as the result
of changes made in the structure of the underlying shareholders
agreements with the previous minority shareholders, and it was
determined that Company no longer has the ability to exercise
control and therefore can no longer treat these entities as
subsidiaries. These transactions had the effect of reducing
reported revenue and EBITDA as compared to the same period in the
prior year and increasing equity earnings in the current period as
compared to the same period in the prior year.
Organic revenue declines in print media were
driven by lower demand for print media products; however, digital
media revenues continue to grow. The environmental and property
information operations, which are reliant on the commercial and
residential real estate industry, had lower revenues resulting from
higher interest rates, which is temporarily decreasing demand for
real estate related products. The agricultural information
operations also had declines in print related revenue but noted
increased revenue in digital products and events. The agricultural
information operations continue to be impacted by the industry
consolidation and the declining demand for print products. The
mining information operations continue to operate in a challenged
industry which is resulting in lower subscription and advertising
revenue.
EBITDA for the period decreased as the result of
lower revenues in the operations as discussed above. Additionally,
rising costs related to inflation, mainly increased employee costs,
and supply chain constraints compounding the effects of reduced
revenue.
Outlook
Despite the challenging economy, the Company
continues to focus on a combination of generating long-term revenue
gains in its growth businesses and cost management in its legacy
businesses. Operational investments in key strategic development
areas continue to be scaled back until the economic outlook becomes
more certain. The Company is monitoring economic conditions and
will respond accordingly.
Softness in the residential and commercial real
estate markets negatively affected operations during the first
quarter. Declines in print products continue to reduced
profitability, which is largely due to the maturation of the print
industry overall. It is expected that industry specific softness
will continue into the second quarter of 2023 with overall economic
uncertainty, inflation, and the impact of higher interest rates.
Although uncertain, it is anticipated that the pressures from
increased interest rates will begin to ease in the second half of
2023.
The Company’s digital media operations held up
during the first quarter of 2023. Long-term, the digital media,
data, and information businesses offer growth potential for the
future. The underlying fundamentals of these products have
demonstrated their value in the face of the challenging market
conditions.
Even with the economic downturn, the Company is
optimistic that certain of its operations can and will continue to
perform well in the long-term. The respective brands, market
positions and value to customers have remained strong. The Company
continues to focus on the long-term growth of its data and
information and digital media operations. Strategic investment
spending in the core areas of focus has resulted in lower operating
profits in the short term, with the goal of improved and more
robust product offerings over time. This investment spending has
become more targeted to strictly necessary spending and will
continue to be scaled back until economic recovery is more certain.
The Company has implemented cost cutting measures that will take
effect throughout 2023.
The Company is working to reach the point where
increases in the revenue, profit and cash flow from its data,
analytics and intelligence products and digital media products
exceeds the decline of its print advertising related profit and
cash flow. The Company has made progress in this regard and can
operate at lower levels of revenue from its digital media, data and
information operations in the future.
Financial Position. As at March
31, 2023, the Company had a cash balance of $15.6 million and $7.4
million of non-recourse mortgages and loans (the majority of which
relates to farm show land in Saskatchewan and Ontario).
The Company has net $5.5 million of deferred
purchase price obligations to be paid over the next two years. This
amount is net of contributions from minority partners. The Company
has a $2.5 million vendor-take back receivable resulting from the
sale of the Company’s interest in Fundata, which was paid in the
second quarter of 2023, and an estimated $0.9 million potential
earn-out proceeds receivable over the next two years from the sale
of the energy business.
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.
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 expectation
to continue investment spending at a slower pace and in targeted
key strategic areas; the expected effects of cost cutting measures;
the expected industry specific softness in 2023; our expectations
as to timing of easing of interest rate increases; and our
expectation that the Company can generate future profits operating
at lower levels of revenue from its digital media, data and
information operations, and 5) pressures from increased interest
rates will ease in the second half of 2023. 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
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.
NON-IFRS FINANCIAL MEASURES
Earnings before interest, taxes, depreciation
and amortization (“EBITDA”), EBITDA margin and EBITDA per share,
are not generally accepted measures of financial performance under
IFRS. Management utilizes EBITDA as a financial performance measure
to assess profitability and return on equity in its decision
making. In addition, the Company, its lenders and its investors use
EBITDA to measure performance and value for various purposes.
Investors are cautioned; however, that EBITDA should not be
construed as an alternative to net income (loss) attributable to
common shareholders determined in accordance with IFRS as an
indicator of the Company’s performance.
The Company’s method of calculating these
financial performance measures may differ from other companies and,
accordingly, they may not be comparable to measures used by other
companies. A quantitative reconciliation of these non-IFRS measures
is included in the section entitled EBITDA Reconciliation.
EBITDA RECONCILIATION
(thousands of dollars) |
|
Three months ended
March 31, |
except share and per share amounts |
|
|
2023 |
|
|
|
2022 |
|
|
|
|
|
|
Net loss
attributable to common shareholders |
|
$ |
(5,217 |
) |
|
$ |
(666 |
) |
Add (deduct): |
|
|
|
|
Non-controlling interests |
|
$ |
(3,637 |
) |
|
$ |
877 |
|
Net interest expense, debt and lease liability |
|
$ |
295 |
|
|
$ |
411 |
|
Depreciation and amortization |
|
$ |
2,972 |
|
|
$ |
3,045 |
|
Loss on disposal |
|
$ |
5,982 |
|
|
$ |
- |
|
Restructuring and other expenses (net) |
|
$ |
305 |
|
|
$ |
(488 |
) |
Share of earnings from joint ventures and associates |
|
$ |
(98 |
) |
|
$ |
(369 |
) |
Income tax recovery |
|
$ |
(2,843 |
) |
|
$ |
(570 |
) |
EBITDA
(1) |
|
$ |
(2,241 |
) |
|
$ |
2,240 |
|
Notes: |
|
|
|
|
(1) Refer to "Non-IFRS Measures" section of MD&A for discussion
of non-IFRS measures used in this table. |
Glacier Media (TSX:GVC)
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