An anonymous director reports

GLACIER REPORTS FIRST QUARTER 2023 RESULTS

Glacier Media Inc. has released its revenue and earnings results for the period ended March 31, 2023.

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 per cent from the same period in the prior year. Consolidated EBITDA (earnings before interest, taxes, depreciation and amortization) 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 with 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 Jan. 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 with the same period in the prior year and increasing equity earnings in the current period as compared with 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 exceed 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 takeback receivable resulting from the sale of the company's interest in Fundata, which was paid in the second quarter of 2023, and an estimated $900,000 potential earnout proceeds receivable over the next two years from the sale of the energy business.

Glacier Media is an information and 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 and marketing solutions.

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