Results are reported below on an adjusted basis to include the Company's share of the results of its joint ventures. Management bases its operating decisions and performance evaluation utilizing these results.
---------------------------------------------------------------------------- (thousands of dollars) For the three months ended March 31, except share and per share amounts 2014(1)(5) 2013(1)(5) ---------------------------------------------------------------------------- Revenue
$76,895 $76,840EBITDA (1) $9,114 $8,039EBITDA margin (1) 11.9% 10.5% EBITDA per share (1) $0.030 $0.027Net income attributable to common shareholders before non-recurring items (1)(2)(3) $1,668 $336Net income attributable to common shareholders per share before non- recurring items (1)(2)(3) $0.006 $0.001Cash flow from operations (1)(2)(3) $9,356 $8,411Cash flow from operations per share (1)(2)(3) $0.031 $0.028Debt net of cash outstanding before deferred financing charges $124,880 $120,907Dividends paid (4) $1,803- Dividends paid per share (4) $0.006- Weighted average shares outstanding, net 300,425,031 300,425,031 ---------------------------------------------------------------------------- Notes: (1) Refer to "Non-IFRS Measures" section of the financial statements . (2) 2014 excludes $0.8 millionof restructuring expense, $0.1 millionof transaction and transition costs and $0.5 millionof other income. (3) For non-recurring items excluded in the prior period, refer to previously reported financial statements. (4) Dividends in 2014 and 2013 total $0.024per share paid quarterly. Dividends in 2013 were declared in March and paid in April. (5) These results are presented on an adjusted basis to include the Company's share of the results of its joint ventures, as management bases its operating decisions and performance evaluation on the adjusted results.
Key Financial Highlights (1)
-- For the quarter ended
March 31, 2014, GVIC'sadjusted consolidated revenues increased $0.1 millionto $76.9 millionfrom $76.8 millionfor the same quarter in the prior year; -- For the period ended March 31, 2014, adjusted consolidated earnings before interest taxes, depreciation and amortization (EBITDA) increased 13.4% to $9.1 millionfrom $8.0 millionfor the same period in the prior year; -- Adjusted cash flow from operations (before changes in non-cash operating accounts and non-recurring items) increased 11.2% over the same period in the prior year to $9.4 million; -- Adjusted net income attributable to common shareholders before non- recurring items was $1.7 millionfor the quarter, compared to $0.3 millionfor the same quarter in the prior year; -- Adjusted EBITDA per share increased to $0.030per share from $0.027per share for the quarter compared to the same quarter in the prior year and net income attributable to common shareholders before non-recurring items per share increased to $0.006per share from $0.001per share for the same quarter in the prior year; -- Adjusted cash flow from operations (before changes in non-cash operating accounts and non-recurring items) increased to $0.031per share from $0.028per share for the same quarter in the prior year; and -- Continued progress was made in reducing leverage, with consolidated debt net of cash outstanding before deferred financing charges and other expenses being lowered to 2.7x trailing 12 months EBITDA as at March 31, 2014.
(1) These results include non-IFRS measures such as EBITDA, cash flow from operations and net income attributable to common shareholders before non-recurring items, and are presented on a basis that includes the Company's share of revenue, expenses, assets and liabilities from its joint venture operations, which reflects the basis on which management makes its operating decisions and performance evaluation. Prior to
The adjusted results are not generally accepted measures of financial performance under IFRS. 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. Please refer to the MD&A for a reconciliation of these non-IFRS measures and adjusted results.
Review of Operations and Value Enhancement Initiatives
For the quarter ended
Improved operating performance resulted as well from a series of value enhancement initiatives first launched in 2013 and continued in 2014. They include:
-- Evolve, Enrich and Extend initiatives. The Company is pursuing a comprehensive initiative to grow its business information operations through an Evolve, Enrich and Extend strategy. This strategy focuses on the provision of richer content, data and information, related analytics and business and market intelligence, and the achievement of greater customer utility and decision dependence. Management is currently reviewing the spectrum of verticals in which it operates with a view of focusing resources and efforts on those verticals and opportunities deemed to have the greatest growth potential that can be realized through this Evolve, Enrich and Extend strategy. Management and staff are using the strategy to develop the Company's community media operations as well. -- Cost reduction initiatives. A variety of significant cost reduction measures have and are being implemented to reduce overall operating costs. The initiatives have been targeted to reduce costs by more than
$10.0 millionon an annualized basis. Savings from these initiatives began to be realized in both the third and fourth quarters of 2013 - and continue in the first quarter of 2014. In implementing these initiatives, management has been diligent to maintain the operating integrity of the businesses, and maintain development spending in areas where growth opportunities exist. -- Sale of real estate assets. The Company has been selling real estate properties to strengthen its financial position. In 2013, more than $12.0 millionwas raised through the sale of property. In early 2014, the Company entered into an agreement to sell its vacant real estate property in Kamloopsfor $4.8 million. The sale is expected to close in the summer of 2014. Other property dispositions are currently being pursued. Given current capitalization and interest rates, monetizing real estate value to reduce leverage has been deemed prudent. Real estate and other asset sales have been targeted to a) cover any required deposit relating to the previously reported notice of possible re-assessment from Canada Revenue Agency(CRA) for the 2008- 2011 income tax years, should a deposit become payable and b) result in a net reduction of leverage from current levels. Any potential CRA re- assessment timing is not currently determinable. -- Sale of non-core assets. The Company continues to assess assets that may be considered non-core.
Many of the Company's business information operations (which include business and professional and trade information) continue to grow and provide attractive opportunities for future growth in both existing and new verticals through multi-platform offerings. In particular, energy, agriculture, environmental risk, environmental compliance, manufacturing and financial services performed well.
Business information operations now represent more than half of
The Company is continuing to develop its business information content and marketing offerings with multi-platform solutions - with a key focus on mobile offerings - digitally designed to integrate more seamlessly with customer decision-making processes. Digital revenues now represent more than one quarter of
-- A new National Network team was created, drawing together top sales and sales management personnel, with a view to offering national clients solutions that span the depth and breadth of all divisions; -- In
February 2014, the business information division launched a new conference - the Next-Gen Forum- which focuses on the importance of corporate social responsibility in the extractive industries sectors. This forum represents a new practice area for GVICand will include new publications and related events and conferences; -- The British Columbia, Albertaand Ontario Export Awards were added to the Company's growing stable of events and conferences. The events solidify important relationships with the Canadian Manufacturers and Exporters association, as well as respective provincial governments and the federal government, along with key marketing clients; -- Several divisions launched formal partnerships with key industry associations that represent lead business segments. These partnerships create new revenue opportunities via events, branded content and new supplements.
Generally weak economic conditions, as well as structural changes in the community newspaper industry, continued to affect revenue levels. National revenues have been generally lower as a result of these factors, although national revenues recovered in April to higher levels than the previous year. Many of the Company's smaller rural community media markets - largely spread across the Prairies - have enjoyed more steady local performance due to their strong local positions and local advertising revenues, although they are still affected by cyclical downturns in key economies such as energy and agriculture, and the factors driving national revenues.
While print advertising revenues continue to be weak in some markets, digital revenues continue to grow steadily in
Significant efforts are also being made to develop new community media features and products. The scale of these efforts continues to build, with the segment generating strong print revenue growth over prior year, augmented with digital revenues and events.
While economic and market challenges have affected the community media operations, management believes that these businesses have unrealized opportunities available and will continue to generate solid cash flow given the nature of the markets in which
On an adjusted basis, to include the Company's share of its joint ventures,
The Company (excluding its joint ventures) reduced debt by
Declaration of Dividend
The Board of Directors declared a quarterly dividend of
The Company continues to grow its business operations through its Evolve, Enrich and Extend strategy and is making good progress in this transformation. While media maturation factors are having an impact as described, the softer economy has continued to play a significant role in dampening revenues, and economic strengthening should result in improved revenues at the margin.
As indicated, management has undertaken a number of Value Enhancement Initiatives to strengthen the Company's financial position and operating performance in the near term, including a) a wide variety of revenue development initiatives, b) sale of real estate assets to reduce leverage and cover a potential tax re-assessment deposit, c) sale of non- core assets, d) significant cost reduction measures targeted to reduce costs by more than
Management will focus in the short-term on a balance of paying down debt, reducing costs and improving profitability, enhancing existing operations, targeting select acquisition opportunities and returning value to shareholders through growth in cash flow per share and payment of dividends.
About the Company:
To supplement the consolidated financial statements presented in accordance with International Financial Reporting Standards (IFRS),
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 the Company's expectations regarding revenues, expenses, cash flows and future profitability and the effect of
Important factors that could cause actual results to differ materially from these expectations include failure to implement or achieve the intended results from
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.
FOR FURTHER INFORMATION PLEASE CONTACT:
GVIC Communications Corp.Mr. Orest SmysnuikChief Financial Officer 604-708-3264 Source: GVIC Communications Corp.