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NEWFOUNDLAND CAPITAL CORPORATION LIMITED THIRD QUARTER 2005

Period Ended September 30  (unaudited)

CNW

Newfoundland Capital Corporation Limited (NCC), one of Canada's leading small and medium market radio broadcasters, today announces its financial results for the third quarter ended September 30, 2005.

 

Organic advertising growth was the key driver in the third quarter for NCC. Acquisitions earlier this year in Northern Ontario and in Alberta also contributed to overall growth in the quarter and year-to-date. The Company continues to execute on its strategic objective of geographic growth across Canada, adding two new stations in Alberta this quarter. The highlights are as follows:

 

  • Revenue growth of 20% to $19.4 million in the quarter, 18% to $56.0 million year-to-date.

 

  • Earnings before interest, taxes, depreciation and amortization (EBITDA(1)) improved by $0.8 million compared to the same quarter last year, and by $3.3 million over the nine month period ended September 2004.

 

  • As previously announced, Management settled a legal suit with the Halterm Income Fund for $3.5 million ($2.9 million after-tax) resulting in a net loss in the quarter of $1.2 million. The Company holds 1.1 million units of the Fund and has received distributions of $1.6 million since its initial investment in May 2003. In addition the current market value of the investment is in excess of book value representing an unrealized gain of $3.2 million.

 

  • Excluding the impact of the settlement, net income would have been on par with the third quarter last year. Year-to-date net income of $3.3 million ($0.29 per share) is lower than the prior year due to the settlement and the gain on disposal of investment in 2004. Excluding these two one-time events, net income would have increased by $1.5 million or $0.13 per share.

 

  • The Company received approval from the Canadian Radio-television and Telecommunications Commission (CRTC) to acquire two radio broadcasting licences in Red Deer, Alberta. The purchase was completed on September 26, 2005.

 

"Operations continued to perform well this quarter with EBITDA ahead of last year. The net loss in the third quarter is a result of the Halterm settlement, however, the settlement of this long-standing contingency clears the way for management to focus on core operations", commented Rob Steele, President and Chief Executive Officer. "In the fourth quarter management will concentrate its efforts on the two new station start-ups in Fredericton, New Brunswick and Ottawa, Ontario as well as the integration of the Red Deer, Alberta acquisition."

 

The Company has a purchase agreement awaiting CRTC approval for broadcasting assets located in Winnipeg, Manitoba. A decision on this is expected in the fourth quarter. The Company has also made a presentation to the CRTC for a new FM licence and a conversion of an existing AM to FM in Charlottetown, Prince Edward Island. Results from the hearing are expected to be announced early in 2006.


The complete report can be found here.

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