Mr. Orest Smysnuik reports

GVIC REPORTS YEAR-END RESULTS

GVIC Communications Corp. has released its cash flow, earnings and revenue figures for the year ended Dec. 31, 2014.

Summary results

The following results are presented on an adjusted basis to include both: (1) the company's share of its joint venture operations on a proportionate basis, because this is the basis on which management bases its operating decisions and performance evaluation and (2) to include discontinued operations that were owned during the year but sold subsequent to year-end in January, 2015. For a reconciliation to results in accordance with international financial reporting standards, refer to both the reconciliation of discontinued operations in adjusted revenue and profit from continuing operations and the reconciliation of IFRS to adjusted results as presented in management's discussion and analysis.

                              FINANCIAL HIGHLIGHTS
                 (thousands of dollars except per-share amounts)

                                                         2014           2013 

Revenue                                         $     322,734  $     328,898
EBITDA                                          $      46,353  $      43,714
EBITDA margin                                            14.4%          13.3%
EBITDA per share                                $       0.154  $       0.146
Net income attributable to common shareholders                              
before non-recurring items                      $      17,932  $      17,295
Net income attributable to common shareholders                              
per share before non-recurring items            $       0.060  $       0.058
Cash flow from operations                       $      44,942  $      43,156
Cash flow from operations per share             $       0.150  $       0.144
Debt net of cash outstanding before deferred                                
financing charges                               $     107,195  $     126,771
Dividends paid                                  $       7,210  $       5,408
Dividends paid per share                        $       0.024  $       0.018

Key financial highlights:

• For the year ended Dec. 31, 2014, adjusted consolidated earnings before interest, taxes, depreciation and amortization, including discontinued operations, increased 6.0 per cent to $46.4-million from $43.7-million in the prior year. The related EBITDA margin increased to 14.1 per cent from 13.1 per cent.
• For the year ended Dec. 31, 2014, adjusted consolidated revenues, including discontinued operations, declined 1.9 per cent to $322.7-million as compared with $328.9-million in the prior year. This included the impact of the closure of the Kamloops Daily News and some other small publications.
• Adjusted cash flow from operations (before changes in non-cash operating accounts and non-recurring items), including discontinued operations, increased 4.1 per cent to $44.9-million from $43.2-million in the prior year.
• Adjusted net income attributable to common shareholders before non-recurring items and including discontinued operations increased to $17.9-million from $17.3-million in the prior year.
• Adjusted EBITDA per share, including discontinued operations, increased to 15.4 cents per share compared with 14.6 cents per share in the prior year.
• Adjusted cash flow from operations per share (before changes in non-cash operating accounts and non-recurring items), including discontinued operations, increased to 15.0 cents per share compared with 14.4 cents per share in the prior year.
• Adjusted net income attributable to common shareholders per share before non-recurring items and including discontinued operations decreased to 6.0 cents per share from 5.8 cents per share compared with the prior year, and $28-million of cash proceeds were realized from the sale of non-core operating assets and real estate during the year and subsequent to year-end at attractive valuations that underscore the value of GVIC's business information assets. As part of this $28-million, GVIC received $19.65-million for the trade media assets sold that were located in Toronto (see restructuring efforts section herein). The sale of these assets has been presented as discontinued operations in the company's 2014 financial statements. The proceeds were used to: (1) pay the 50-per-cent deposit made to appeal the previously disclosed Canada Revenue Agency reassessment and related total liabilities of $45-million, (2) pay down debt, and (3) acquire a majority position in Evaluate Energy, an energy information database and research company, based in the United Kingdom, with a strong presence in Canada.
• Subsequent to year-end, the company sold a group of community media assets on Vancouver Island and in the Lower Mainland of British Columbia and acquired several community media assets in the Lower Mainland. The net proceeds from the transaction were used to pay down debt. The transaction immediately increases the profitability of the company's community media operations.
• Adjusted consolidated debt net of cash outstanding (before deferred financing charges) was reduced to 2.4 times trailing 12 months consolidated adjusted EBITDA (including discontinued operations) as at Dec. 31, 2014.

Restructuring efforts

GVIC has been focused on a comprehensive program to: (1) restructure operations by narrowing the number of sectors in which it operates to redeploy resources, effort and capital to higher-growth areas, (2) strengthen its financial position, and (3) enhance shareholder value. This program was initiated 18 months ago as a result of an overall review of the company's operations and situation.

As part of this program, GVIC sold its minority interest in Iron Solutions in December, 2014, as well as a group of trade media assets based in Toronto in January, 2015. The sale proceeds from these two transactions totalled $23.3-million before transaction-related expenses. In addition, $4.8-million of real estate was sold in August, 2014.

GVIC sold its minority interest in Iron Solutions as part of the sale of 100 per cent of Iron Solutions to Trimble. GVIC's proceeds were $4.3-million for its interest, of which $600,000 has been placed in escrow. Iron Solutions is based in Franklin, Tenn., and is a seller of integrated software services for agricultural equipment dealerships. While agriculture is a sector in which GVIC intends to focus growth efforts, it was deemed prudent to sell the interest at an attractive valuation and focus efforts and capital on organic growth and acquisitions, over which it has greater operational control.

GVIC received $19.65-million for the trade media assets sold that were located in Toronto. These included GVIC's automotive, construction and design, manufacturing, transportation, occupational health and safety, communications, dental, insurance, forestry, meetings and travel trade publications, and related digital assets, as well as Scott's Directories. GVIC retained the ERIS environmental risk information business, Northern Miner mining information group and the Food in Canada business that were operated with the trade media assets sold, and will retain the associated revenue and contribution. The assets sold covered a broad spectrum of industry sectors, which did not align with GVIC's strategy to narrow its focus. Conversely, the assets fit very well with the operations of the buyers, and offered significant growth opportunities to them.

Areas of focus going forward

GVIC intends to focus its business information growth efforts in: (1) the global agriculture, energy and mining information sectors, given Canada's important international presence in these natural resources sectors, and the strong competitive position GVIC owns in the related information spaces, (2) the environmental risk information space, (3) the real estate information space, and (4) the mutual fund information space. These sectors are dynamic in nature, and their changing and continually evolving needs are expected to increase the demand and value relating to information, intelligence and marketing solutions.

GVIC is pursuing these growth efforts through a comprehensive evolve, enrich and extend strategy. The strategy focuses on providing richer content, data and information, related analytics, and business and market intelligence, as well as more comprehensive and sophisticated marketing solutions. Through this enrichment, products and services achieve greater customer utility and decision dependence. The strategy is intended to provide growing levels of sales from high-margin products with high levels of recurring revenue, while requiring low levels of sustaining capital investment to generate strong free cash flow and return on capital. As strategy implementation accelerates, it is expected that a greater portion of the company's revenue will come from subscription, specialized report, customized application and other recurring-revenue-oriented information product sales.

Operational performance

As stated, for the year ended Dec. 31, 2014, adjusted consolidated EBITDA, including discontinued operations, grew 6.0 per cent to $46.4-million, as compared with $43.7-million last year. GVIC's consolidated EBITDA margin, including discontinued operations, on an adjusted basis, increased to 14.4 per cent for the year ended Dec. 31, 2014, from 13.3 per cent compared with last year.

Adjusted consolidated revenue, including discontinued operations, declined 1.9 per cent to $322.7-million. Growth in business and professional information and trade media revenue was offset by a decline in community media revenue. The revenue decline also includes the impact from the closure of the Kamloops Daily News and other small publications.

The EBITDA generated was achieved primarily through a focus on: (1) new sales from higher-margin products and (2) cost management, while maintaining appropriate product and personnel investment.

Business information

Many of GVIC's business information operations (which include business and professional and trade information) continue to grow and provide attractive future growth opportunities in both existing and new sectors. This growth is being achieved through multiplatform offerings, integrated marketing solutions and rich data, analytics, and intelligence services.

Business information operations represent approximately 60 per cent of GVIC's adjusted EBITDA. Almost half of this EBITDA comes from rich data information products.

These products provide essential information that generates highly profitable recurring revenues, and are well positioned for scalable growth. The product lines offer resiliency in challenging economic times as they provide critical insight and analysis. GVIC's transformation plans focus on these high-value information products, as well as developing more comprehensive and sophisticated marketing solutions.

Digital revenues now represent approximately 35 per cent of GVIC's business information revenues. Efforts continue to develop different types of digital revenues, including content, advertising, comprehensive marketing solutions and subscriptions -- supported by modelling and analysis tools.

Community media

GVIC's community media groups continue to face challenges associated with traditional print advertising. In particular, national and other print advertising sales continue to move to digital. To offset this trend, efforts are being made to target new areas of revenue sources to offset the declines. In keeping with the company's multiplatform revenue strategy, new marketing programs have been developed in print, digital, mobile and other channels.

To this end, a comprehensive revenue ramp-up program resulted in a significant increase in new features and supplements revenue. Advertisers have shown willingness to purchase advertising in a variety of new print marketing ideas in which new audience engagement features extensively.

Digital revenues continued to grow with a focus on products that can be readily monetized to deliver profitable revenue. Operating investments are improving GVIC's digital community media products, helping to launch new products, expand client inventory and develop internal digital skills.

Previous investment in upgraded print facilities, in one of the company's joint ventures, has resulted in significant new revenues and EBITDA. Recognizing the industry's maturing nature, this investment was made to improve quality and lower operating costs for existing company-owned products, and achieve returns with outside long-term contracts that can deliver an attractive payback with maturing revenue assumptions.

Cost reduction programs introduced in the second half of 2013 and throughout 2014 resulted in significant cost savings.

Subsequent to year-end, the company sold a group of community media assets on Vancouver Island and in the Lower Mainland of British Columbia and acquired several community media assets in the Lower Mainland. The net proceeds from the transaction were used to pay down debt. The transaction immediately increases the profitability of the company's community media operations.

CRA reassessment

As previously disclosed, the company received tax notices of reassessment from the CRA relating to the taxation years ended Dec. 31, 2008, through 2013 inclusive. The reassessments deny the application of non-capital losses, capital losses, and scientific research and experimental development tax credits claimed for those years. The total potential liability relating to additional taxes payable for the reassessed years to the CRA and provincial governments, including interest and penalties, would be approximately $45-million.

In January, 2015, the company filed a notice of objection to the CRA. In connection with filing the notice of objection, the company paid 50 per cent of the amounts claimed by the CRA. The company paid $4.5-million of this balance in December, 2014, and $15.3-million in January, 2015, covering the total deposit owing to the CRA. Additional amounts may be due at a later date. The company and its counsel believe that the filing positions adopted by the company are appropriate and in accordance with the law. The company intends to vigorously defend such positions. If the company is successful in defending its positions, deposits made plus applicable interest will be refunded. There is no assurance that the company's objections and appeals will be successful. If the CRA is successful, the company will be required to pay the balance of taxes owing plus applicable interest.

Financial position

On an adjusted basis, including the company's share of the joint venture interests, GVIC's consolidated debt net of cash outstanding before deferred financing charges was reduced to 2.4 times trailing 12 months EBITDA including discontinued operations as at Dec. 31, 2014.

The company (excluding its joint venture interests and discontinued operations) made net debt repayments of $18.5-million during the year. GVIC's consolidated debt, net of cash outstanding before deferred financing charges, was $95.4-million as at Dec. 31, 2014.

Capital expenditures (excluding its joint venture interests and discontinued operations) were $4.2-million for the year ended Dec. 31, 2014, compared with $11.7-million in the prior year. Most of the current-year expenditures relate to program development, information technology infrastructure, building improvements and other sustaining capital expenditures. A significant portion of the capital expenditures made in the prior year were investment capital expenditures, the majority of which related to the purchase of a building and building improvements.

The board of directors declared a quarterly dividend of 0.6 cent per share to shareholders of record on March 25, 2015, payable on April 7, 2015. The dividend is consistent with the company's dividend policy of paying 2.4 cents per share per annum, payable quarterly.

Outlook

Challenges continue to be faced in community media in print advertising, although the asset dispositions and purchases on Vancouver Island and in the Lower Mainland will contribute immediately to the profitability of the company's community media group as indicated.

Importantly, the company has made substantial progress toward its objectives of strengthening its financial position and narrowing its spectrum of operating sectors to redeploy capital and resources to higher-growth and higher-value products and services.

While further efforts will be made toward these long-term objectives, management is now in a better position to accelerate its transformation plans.

Going forward, GVIC will now focus its business information growth efforts in the agriculture, energy and natural resource sectors, and the environmental risk, real estate and mutual fund information sectors. These spaces are dynamic in nature, and their changing and continually evolving needs are expected to increase the demand and value relating to information, intelligence and marketing solutions. While advertising revenues in the natural resource sectors are cyclical in relation to the commodity markets, the need for information and the need for related products in these sectors are strong and resilient. The company's environmental risk and mutual fund information revenues are growing rapidly. The transformation of the company's real estate information business is still at an early stage, but offers great opportunity as well.

As indicated, GVIC is pursuing these growth efforts through a comprehensive evolve, enrich and extend strategy. The strategy focuses on providing richer content, data and information, related analytics, and business and market intelligence, as well as more comprehensive and sophisticated marketing solutions.

Management will continue to focus in 2015 on a balance of paying down debt through cash flow and the sale of non-core assets.

Continued operating focus will also be placed on prudent cost management and new revenue generation to offset areas of revenue softness, including community media print advertising revenue and the current softness in various commodities markets.

Once leverage is reduced to lower operating levels, management will seek a continuing balance of maintaining debt at those levels and delivering increased value to shareholders through operations, acquisitions and dividends.

In summary, significant focus and related investment will continue to be made to enhance GVIC's business information assets. These investments will strengthen the company's position in the markets that it covers, expand the scope of quality of information products and marketing solutions offered where strong sustainable competitive positions are available, and expand GVIC's information and product development staff, technology and related resources.

We seek Safe Harbor.