Glacier Media Inc.’s (“Glacier” or the “Company”) overall financial results for the second quarter were impacted by a change in accounting treatment at one of its operations. Excluding the change in accounting, revenues were $55.7 million, which was $2.5 million or 4.3% lower than Q2 2017 and EBITDA was $5.7 million, which was $0.6 million or 9.5% lower than Q2 2017. Overall the underlying operating results were consistent with results in recent quarters. The Company’s growth initiatives continued to progress well, while print advertising revenues declined as expected.
Including the impact of accounting change, overall, adjusted(1) consolidated EBITDA, including the Company’s share of its joint venture interests, decreased to $4.6 million for the quarter ended June 30, 2018 compared to $6.3 million for the same period in the prior year. Adjusted consolidated revenue was $54.8 million for the quarter compared to $58.2 million for the same quarter in the prior year.
Revenue and EBITDA at Specialty Technical Publishers (“STP”) were reduced $0.9 million and $1.1 million respectively primarily due to an accounting treatment change reflecting the on-going transition in operations to a digital, subscription based business and phasing out of the paper version of the product. The adjustment is to defer revenue and subscription contracts in process to change the recognition methodology to the term of the contract.
In addition, adjusted consolidated results were impacted by two transactions when compared to the same period last year: 1) the sale of the Comprehensive Oilfield Service and Supply Database (“COSSD”) which was published by the Company last June; 2) the purchase of the remaining interest in Infomine, resulting in Infomine’s results being consolidated into the Company’s results in Q2 2018. Together, these two transactions resulted in a net revenue decrease of $0.6 million and a net EBITDA increase of $0.2 million as compared to last year.
The environmental, property and financial information operations continued to generate growth. Included in the segment results was the impact of the accounting change at STP. Adjusted revenues for the segment were $6.9 million and EBITDA was $0.7 million. Operating investments in ERIS and REW dampened EBITDA but resulted in revenue and traffic growth.
The commodities sector continued its recovery, resulting in a solid quarter for the Company’s commodity information segment. Although the segment’s adjusted revenue declined 7.0% to $12.1 million (due to the sale of the COSSD directory) the adjusted EBITDA increased by $0.8 million to $1.0 million.
The community media group continued to make progress in its efforts to evolve and build its digital media business while leveraging its traditional print and flyer content and offerings. Adjusted community media revenue declined by 4.9% to $35.8 million while adjusted EBITDA declined by 9.5% to $5.0 million. Digital revenues grew 50%, with good progress being made in the Company’s portfolio of digital products and marketing solutions offerings.
Markets important to the Company’s operations continue to improve. The mining industry has been in a growth phase and the energy and agriculture markets appear to have stabilized. Improvements in these markets should aid the Company’s related information businesses as well as the Western Canadian communities that our community media operations serve. That said, given anticipated print advertising declines and continued near-term uncertainty and market risk, the Company will operate cautiously and evaluate cost reduction initiatives where appropriate in the affected businesses. The Company plans to continue to invest in strategic areas. The investments are critical to the Company’s growth plan and are resulting in demonstrable value creation.
Management intends to build-on the progress of the last few years in strengthening the Company’s financial position by further reducing debt. A strengthened balance sheet will mitigate risk while allowing the ongoing and planned operational and capital investments.
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