DAILY NEWS Nov 9, 2012 8:54 AM - 0 comments

NEWCAP Reports Q3 Financial Results

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2012-11-09

Newfoundland Capital Corporation Limited announces its financial results for the third quarter ending September 30, 2012.

Highlights

Revenue for the third quarter of $33.7 million was $1.8 million or 6% higher than last year. Year-to-date revenue of $95.5 million was $3.6 million or 4% higher than 2011. The growth was due to a combination of organic growth as well as incremental revenue from the acquired stations in British Columbia.

Earnings before interest, taxes, depreciation and amortization ("EBITDA"(1)) of $8.9 million in the quarter were $0.3 million or 3% higher than last year due to higher revenue. Year-to-date EBITDA of $22.7 million was $1.9 million or 8% lower than 2011 due to higher operating expenses. Excluding this year's $1.1 million expense related to the extension of stock options and the accounting for the Company's equity total return swap which reduced operating expenses in the prior year by $1.2 million, year-to-date EBITDA would have been 2% higher than 2011.

Profit (loss) for the period - the Company posted a loss of $1.1 million in the quarter compared to profit of $4.3 million in 2011. The decrease in profit was primarily due to a $7.5 million non-cash impairment charge recognized in the quarter, further described below. Year-to-date profit of $3.5 million was $9.6 million or 74% lower than the same period in 2011. The impairment charge combined with unrealized mark-to-market investment portfolio losses of $2.3 million this year caused the decline in year-to-date profit.

Significant events

In the third quarter the Company recognized an impairment charge of $7.5 million related to its television operations in Lloydminster, Alberta. This was triggered by the decision by the Canadian Radio-television and Telecommunications Commission to discontinue the Local Programming Improvement Fund effective August 31, 2014. The details of this are more fully described in the Management's Discussions and Analysis and in the unaudited condensed interim consolidated financial statements.

Pursuant to its Normal Course Issuer Bid, the Company repurchased 891,134 shares for $7.1 million in the quarter bringing the year-to-date total of shares repurchased to 1,161,768 for total cash consideration of $9.3 million.

On August 9, 2012, the Board of Directors declared dividends of $0.06 per share to all shareholders of record as at August 31, 2012. Dividends of $1.8 million were paid on September 14, 2012.

"We are very pleased that positive revenue growth has continued into the third quarter. We see some softening in that trend heading into the fourth quarter" commented Rob Steele, President and Chief Executive Officer. "We are focusing our attention on managing costs to deliver solid EBITDA results for 2012."

Financial Highlights - Third quarter

(thousands of dollars except share information) 2012 2011

Revenue $ 33,699 31,905

EBITDA(1) 8,850 8,552

Profit (loss) for the period (1,061) 4,334

Earnings (loss) per share - basic (0.04) 0.14

Earnings (loss) per share - diluted (0.04) 0.14

Share price, NCC.A (closing) 7.50 7.75

Weighted average number of shares outstanding (in thousands) 29,465 30,328

Total assets 229,510 230,195

Long-term debt 52,855 51,662

Shareholders' equity 114,074 109,908

(1) Non-IFRS Accounting Measure

EBITDA is a measure that is not defined by International Financial Reporting Standards and is not standardized for public issuers. This measure may not be comparable to similar measures presented by other public enterprises. The Company believes this is an important measure because the Company's key decision makers use this measure internally to evaluate the performance of management. The Company's key decision makers also believe certain investors use it as a measure of the Company's financial performance and for valuation purposes. A calculation of this measure is included in the Company's Third Quarter Report.

The Company's complete Third Quarter Report, which includes the unaudited condensed interim consolidated financial statements along with related notes in accordance with International Financial Reporting Standards ("IFRS") and the Management's Discussion and Analysis, are available on the Company's website at www.ncc.ca and www.sedar.com.



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