Glacier Reports First Quarter Results

VANCOUVER, BRITISH COLUMBIA--(Marketwired - May 13, 2014) - Glacier Media Inc. ("Glacier" or the "Company") (TSX:GVC) reported cash flow, earnings and revenue for the quarter ended March 31, 2014.

Summary Results

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	$76,840
EBITDA (1)	$8,927	$7,889
EBITDA margin (1)	11.6%	10.3%
EBITDA per share (1)	$0.10	$0.09
Net income attributable to common shareholders before non-recurring items (1)(2)(3)	$1,941	$540
Net income attributable to common shareholders per share before non-recurring items (1)(2)(3)	$0.02	$0.01
Cash flow from operations (1)(2)(3)	$9,184	$8,261
Cash flow from operations per share (1)(2)(3)	$0.10	$0.09
Debt net of cash outstanding before deferred financing charges	$101,739	$120,907
Dividends paid (4)	$1,838	-
Dividends paid per share (4)	$0.02	-
Weighted average shares outstanding, net	89,083,105	89,243,102
Notes:
(1) Refer to "Non-IFRS Measures" section of the financial statements.
(2) 2014 excludes $0.8 million of restructuring expense, $0.1 million of transaction and transition costs and $0.5 million of 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 $0.08 per 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, Glacier's adjusted consolidated revenues increased $0.1 million to $76.9 million from $76.8 million for 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 13.2% to $8.9 million from $7.9 million for 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 $9.2 million;
• Adjusted net income attributable to common shareholders before non-recurring items was $1.9 million for the quarter, compared to $0.5 million for the same quarter in the prior year;
• Adjusted EBITDA per share increased 11.1% to $0.10 per share from $0.09 per 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 $0.02 per share from $0.01 per 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 $0.10 per share from $0.09 per 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 2.3x trailing 12 months EBITDA as at March 31, 2014.

Note:

⁽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 January 1, 2013 the Company consolidated the financial results of its joint ventures on a proportionate basis in accordance with then applicable accounting standards. Since January 1, 2013, the Company has been required to report the financial results of its joint ventures using equity accounting under the new IFRS accounting standards.

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

Glacier Media Inc. ("Glacier" or the "Company") completed the first quarter of 2014 with continued improvement. Consolidated EBITDA was up 13.2% for the quarter compared to the same quarter in the prior year on an adjusted basis⁽¹⁾. Consistent with Glacier's fourth quarter 2013 performance, revenues returned to prior year levels as a number of the Company's operations experienced improved market opportunities and revenue growth. The profit performance was also the result of a variety of initiatives that are being undertaken to affect the transformation of the Company and enhance value for shareholders. These initiatives are discussed below.

For the quarter ended March 31, 2014, adjusted consolidated revenue increased 0.1% to $76.9 million and adjusted consolidated EBITDA increased to $8.9 million, from $7.9 million the prior year. Revenue remained consistent despite the closure of the Kamloops Daily News and other small publications. Revenues were also affected by weaker community media revenues, which were impacted by overall economic conditions first experienced in 2013 that continue in 2014, as well as digital competition. The community media revenue shortfalls were offset by stronger business information revenues and increased printing revenues in one of Glacier's joint venture operations.

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 million on 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 million was raised through the sale of property. In early 2014, the Company entered into an agreement to sell its vacant real estate property in Kamloops for $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.

Business Information

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 Glacier's EBITDA, of which 45% comes from rich information digital data products. These products provide essential information that generate highly profitable recurring revenues, and are particularly well positioned for scalable growth. The product lines offer resiliency in challenging economic times as they provide critical insight and analysis to Glacier's customers. Much of 2014's strategic initiatives will focus on enhancing and expanding existing product lines, with a view to increasing the level of customer decision dependence, as a key aspect of the Evolve, Enrich and Extend strategy.

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 Glacier's business information revenues. Efforts continue to be refined with respect to developing different types of digital revenues, including content, advertising and subscriptions. A consistent focus on various ways of enriching content is resulting in improved rates for advertising positioned alongside rich information.

In 2014, Glacier's business information divisions continued their focus on integrated solutions selling. Among the activities:

• 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 Glacier and will include new publications and related events and conferences;
• The British Columbia, Alberta and 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.

Community Media

Glacier's community media operations offer broad coverage across Western Canada in local markets, and continue to offer a strong value proposition through local information and marketing channel utility.

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 Glacier's community media operations with new product offerings including extended market coverage and specialty digital products. Operating expense investments are being made to improve the digital community media products in order to exploit new revenue opportunities, particularly of the larger markets, focusing on content delivery and advertising effectiveness. The investments are being made prudently with a view to generating profitable revenue. As a result, Glacier's community media digital operations are contributing attractive net profit margins to the Company.

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 Glacier operates - particularly within the more robust micro-economies of Western Canada. This cash flow can be used to fund growth and reduce leverage through both internal investment and acquisition of digital business information and community media assets, as well as debt repayments.

Financial Position

On an adjusted basis, to include the Company's share of its joint ventures, Glacier's consolidated debt net of cash outstanding before deferred financing charges and other expenses was reduced to 2.3x trailing 12 months EBITDA as at March 31, 2014.

The Company (excluding its joint ventures) reduced debt by $1.7 million during the period. Glacier's consolidated debt net of cash outstanding before deferred financing charges was $94.0 million as at March 31, 2014.

Capital expenditures (excluding the Company's joint ventures) were $0.8 million for the quarter ended March 31, 2014 compared to $1.1 million for the same period in the prior year.

Declaration of Dividend

The Board of Directors declared a quarterly dividend of $0.02 per share to shareholders of record on June 13, 2014 and payable on July 4, 2014. The dividend is consistent with the Company's dividend policy of paying $0.08 per share per annum, payable quarterly.

Outlook

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 $10.0 million, and e) review of the spectrum of verticals in which the Company operates to focus operating and financial resources on those verticals deemed to have the greatest growth potential. Profitability enhancements and asset sale initiatives are intended to significantly improve Glacier's financial position and place the Company in a better position from which to take advantage of organic growth and acquisition opportunities, particularly within the digital business information space.

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.

Shares in Glacier are traded on the Toronto Stock Exchange under the symbol GVC.

About the Company: Glacier Media Inc. is an information communications company focused on the provision of primary and essential information and related services through print, electronic and online media. Glacier is pursuing this strategy through its core businesses: the community media, trade information and business and professional information markets.

Financial Measures

To supplement the consolidated financial statements presented in accordance with International Financial Reporting Standards (IFRS), Glacier uses certain non-IFRS measures that may be different from the performance measures used by other companies. These non-IFRS measures include cash flow from operations (before changes in non-cash operating accounts and non-recurring items), net income attributable to common shareholders before non-recurring items, earnings before interest, taxes, depreciation and amortization (EBITDA) and all 'adjusted' measures, which are not alternatives to IFRS financial measures. Management focuses on operating cash flow per share as the primary measure of operating profitability, free cash flow and value. EBITDA per share is also an important measure as the Company has low ongoing capital expenditures and depreciation and amortization largely relates to acquisition goodwill and copyrights and does not represent a corresponding sustaining capital expense. These non-IFRS measures do not have any standardized meanings prescribed by IFRS and accordingly they are unlikely to be comparable to similar measures presented by other issuers.

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 Glacier's strategic initiatives, including its expectations to grow its business information operations, to implement cost reduction measures, to sell real estate properties and utilize proceeds of such sales to cover required CRA re-assessment deposits, to produce products and services that provide growth opportunities, to organic development and new business acquisitions, to improve profitability, to grow cash flow per share, to pay dividends, to repurchase shares and to reduce debt levels and as to its expectations as to the level of investment in capital expenditures. 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, and 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 Glacier's strategic initiatives, the failure to implement or realize cost savings in a timely manner or in the expected amounts, the failure to negotiate or complete the sale of real estate assets, the failure to identify, negotiate and complete the acquisition of new businesses, the failure to develop new products, and the other risk factors listed in the Company's Annual Information Form under the heading "Risk Factors" and in the Company's MD&A under the heading "Business Environment and Risks", many of which are out of the Company's control. These other risk factors include, but are not limited to, 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 industry, discontinuation of the Department of Canadian Heritage's Canada Periodical Fund's Aid to Publishers, 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 and financing and debt service 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.