VANCOUVER, British Columbia, March 22, 2024 (GLOBE NEWSWIRE) -- Glacier Media Inc. (TSX: GVC) ("Glacier" or the "Company") reported revenue and earnings for the year ended December 31, 2023.
SUMMARY RESULTS
| (thousands of dollars) | ||||||||
| except share and per share amounts | 2023 | 2022 | ||||||
| Revenue | $ | 154,940 | $ | 176,012 | ||||
| EBITDA (1) | $ | (4,169 | ) | $ | 3,083 | |||
| EBITDA (1) margin | (2.7 | %) | 1.8 | % | ||||
| EBITDA (1) per share | $ | (0.03 | ) | $ | 0.02 | |||
| Capital expenditures | $ | 4,316 | $ | 4,945 | ||||
| Net loss attributable to common shareholder | $ | (99,250 | ) | $ | (29,553 | ) | ||
| Net loss attributable to common shareholder per share | $ | (0.76 | ) | $ | (0.22 | ) | ||
| Weighted average shares outstanding, net | 131,198,520 | 132,558,408 | ||||||
(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 year ended December 31, 2023, was $154.9 million, down $21.1 million or 12.0% from the prior year. Consolidated EBITDA loss for the year was $4.2 million, down $7.3 million from positive EBITDA of $3.1 million in the prior year. During Q1 2023, the Company completed two separate transactions that resulted in three operations being accounted for as joint ventures, as compared to the operations' profit and loss previously being consolidated. 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. During the year, the Company completed the closure or sale of certain unprofitable print community media publications, which also had the effect of' reducing revenue.
Organic revenue declines in print media were driven by lower demand for print media products. Digital media achieved some revenue growth during the year. The environmental and property information operations held revenue consistent despite being reliant on the commercial and residential real estate industry, which is being affected by higher interest rates temporarily decreasing demand for real estate related products. The agricultural information operations noted a decrease in revenue driven by declines in print related revenue, resulting from the industry consolidation of advertisers and the declining demand for print products overall, which were partially offset by increases in the outdoor exhibition show revenue. The mining information operations continue to operate in a challenged industry, especially with respect to junior miners, which is resulting in lower advertising revenue. Additionally, the Company sold the mining media operations in the fourth quarter of 2023.
EBITDA for the year decreased as the result of lower revenues in the operations as discussed above and certain entities which were consolidated becoming joint ventures. Additionally, rising costs related to inflation, (e.g. increased employee costs, newsprint, and printing costs) compounded the effects of reduced revenue, and legal costs increased as compared to the prior year. This was partially offset by the effects of cost reduction measures that were put in place earlier in 2023, including lower investment spending and targeted print publication closures having a positive effect on results overall.
Outlook
Despite the challenging economic environment, 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.
The Company has taken action to reduce print operations where print products are no longer economically feasible. This transition has already been completed in a number of markets resulting in the closure of the related print publications. The targeted closure of print operations will continue to occur into 2024 and allow the Company to focus on the transformation to digital products.
Higher interest rates continue to negatively impact results. Softness in the residential and commercial real estate markets negatively affected operations during the year. It is expected that industry specific softness will continue 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 stabilize sometime in 2024.
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 challenging economic environment, some of the Company's operations continue to perform well. The Company is optimistic that many of its operations can and will continue to perform well in the long-term and will continue to generate strong cash flows and enhance shareholder value. 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. The targeted closure of print publications which are no longer economically feasible will help the transition to digital and support the long-term growth therein. 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 throughout 2023 and will continue to proactively implement targeted measures into 2024.
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.
Uncertain Tax Position
In relation to the tax notices of reassessments and assessments from the Canada Revenue Agency ("CRA"), and unfavourable rulings in similar cases heard in the Supreme Court of Canada and in the Court of Appeal in 2023, the Company has recorded a full provision of the $23.5 million against the carrying value of the deposits and deferred tax assets related to unused carryforward amounts and a liability of approximately $47.3 million for unpaid taxes and estimated interest for the reassessment. The total of these amounts, $70.8 million, was recognized in the Statement of Operations and was recorded as income tax expense for the provision of uncertain tax positions of $52.2 million and an estimated interest expense on uncertain tax positions of $18.7 million.
Financial Position. As at December 31, 2023, the Company had a cash balance of $6.6 million and $7.2 million of non-recourse mortgages and loans (which relates to farm show land in Saskatchewan and Ontario).
The Company has net $3.0 million of deferred purchase price obligations to be paid over the next two years. This amount is net of contributions from minority partners.
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 expectations as to investment spending and in targeted key strategic areas and the scaling back of such spending; the expected effects of cost cutting measures and targeted closure of print publications; the expected industry specific softness in 2024; our expectations as to timing of easing of interest rate increases; and pressures from increased interest rates will begin to stabilize in 2024. 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, 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) | ||||||||
| except share and per share amounts | 2023 | 2022 | ||||||
| Net loss attributable to common shareholders | $ | (99,250 | ) | $ | (29,553 | ) | ||
| Add (deduct): | ||||||||
| Non-controlling interests | $ | (2,436 | ) | $ | 624 | |||
| Net interest expense, debt and lease liability | $ | 19,925 | $ | 1,713 | ||||
| Depreciation and amortization | $ | 11,873 | $ | 12,455 | ||||
| Loss on disposal, net | $ | 2,726 | $ | - | ||||
| Impairment expense | $ | 13,588 | $ | 15,525 | ||||
| Other income | $ | (2,115 | ) | $ | (4,247 | ) | ||
| Restructuring and other expenses (net) | $ | 7,790 | $ | 904 | ||||
| Share of (earnings) losses | ||||||||
| from joint ventures and associates | $ | (590 | ) | $ | 11,829 | |||
| Income tax expense (recovery) | $ | 44,320 | $ | (6,167 | ) | |||
| EBITDA (1) | $ | (4,169 | ) | $ | 3,083 | |||
| Notes: | ||||||||
| (1) Refer to "Non-IFRS Measures" section of MD&A for discussion of non-IFRS measures used in this table. | ||||||||
