Magazine article Editor & Publisher

Meanwhile, Up North, A Newspaper Chain Actually Flourishes

Magazine article Editor & Publisher

Meanwhile, Up North, A Newspaper Chain Actually Flourishes

Article excerpt

Profits up 22.4% on a revenue jump of 22.3%, with cash flow up more than 35% and margins actually increasing to 26.8% from 24.2% a year-ago -- these aren't the kind of second-quarter results we've seen much of in this dismal financial reporting season.

Oh, and this particular newspaper chain has a light debt load of 2.2 times EBITA (earnings before interest, taxes, and amortization) to debt, and can handle future acquisitions with cash on hand. That we definitely haven't seen elsewhere in August.

But while publicly traded U.S. newspaper companies troop to Business Wire with reports of sinking revenues, poor same-store comps -- and difficulty staying within their loan covenants ratio limits of 6 or 7 times -- out in Vancouver, B.C., Glacier Media Inc. this week quietly released some eye-popping Q2 results.

Glacier said its second-quarter profit jumped 22.4% to $10.4 million on revenue that rose 22.3% to $68.9 million. Earnings rose to 14 cents a share, up from 11 cents a share in the year-ago period.

Glacier also managed to bump up its EBITA margin for the quarter to 26.8% from 24.2% in Q2 '07.

The results seem a vindication for Glacier's strategy of diversifying its portfolio of newspapers -- many of them cast off from the old Hollinger International just before and after Conrad Black's fall from grace -- with trade, B2B, and agricultural publications. It's a strategy smoothed these days by the economy boom in the Western Canada oil and natural gas patch.

"Glacier's strategic diversification in the strong Western Canadian local newspaper, agriculture, mining and energy sectors, as well as a variety of other trade and business and professional information niches, continues to produce strong consolidated revenue, EBITA and cash flow growth," the company said in its earnings release.

Glacier said its newspapers, located in more than 70communities in British Columbia, Alberta, Saskatchewan and Manitoba, grew revenue as a group during the quarter.

"Unlike some of the factors affecting publishers of large metropolitan daily newspapers, Glacier's local daily and weekly community newspapers continue to be the primary source of local information for readers, and continue to enjoy high readership levels because of the demand for this information," Glacier said.

Another huge difference between Glacier and American big city publishers is its debt situation. Read the following excerpt from Glacier's earnings release and weep -- GateHouse Media, Journal Register Co., Tribune Co. …

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