DARTMOUTH, NS – Small market radio station owner Newfoundland Capital Corporation, said Friday that its consolidated revenue of $24.6 million in the fourth quarter showed a 29% improvement over the last three months of 2004, with year-to-date revenue of $80.6 million being 21% better than last year.
Organic, or same-station growth of 8% contributed to the increase in revenue in the quarter, while new stations and acquisitions accounted for 21%. For the year, organic growth of 9% contributed to the revenue increase while 12% came from new launches and acquisitions.
However, EBITDA (earning before interest, taxes, depreciation and amortization) declined 6% in the fourth quarter. Increased promotional spending in the fourth quarter caused the decline in EBITDA as a percentage of revenue, said the company’s late Friday press release.
Incremental expenses from business and license acquisitions and new station launches accounted for $3.3 million of the increase in operating expenses in the quarter and $6.9 million year-to-date. The company incurred additional expenses in the third and fourth quarters related to new premises in Charlottetown, Edmonton and Ottawa and in increased promotional activities.
Year-to-date EBITDA improved 20% over the prior year primarily due to the upward trend in broadcasting operations, says the company. Organic improvements led to 13% of the growth while incremental EBITDA from the business and license acquisitions and new station launches accounted for the remaining 7% increase.
Other highlights during the quarter and year included:
* January 31, 2005 – the company acquired the assets of Shortell’s Limited ("Shortell’s") and its related companies, in Lloydminster, Alberta including three radio and two television broadcasting licenses and an outdoor advertising business.
* May 30, 2005 – the company acquired the broadcasting assets of Big Pond Communications (2000) Inc. ("Big Pond") in Thunder Bay, Ontario, the primary asset being an FM radio license.
* September 26, 2005 – the company acquired 100% of the common shares of 4323041 Canada Inc. ("4323041") entitling it to the property, assets, licenses and rights of 4323041 used in connection with the operation of two FM radio licenses in Red Deer, Alberta.
* December 5, 2005 – the company acquired the remaining 80.1% of the common shares of Winnipeg’s CKVN Radiolink System Inc. ("CKVN"), having initially acquired 19.9% in February 2005. This acquisition entitles the company to the broadcast license, net assets and rights used in connection with an FM radio license in Winnipeg, Manitoba. The transactions were accounted for using the purchase method and the results of operations have been included in the consolidated financial statements since the respective acquisition dates.
* The company launched four FM radio broadcast licenses in Alberta throughout 2005, a new FM license in Fredericton, New Brunswick in July and one in Ottawa (Live 88.5) at the end of December.
* New stations were launched in Camrose, Brooks, Whitecourt and Wainwright, Alberta and Fredericton, New Brunswick.
* On December 16, 2005, the company announced that it had entered into an agreement to acquire CKJS Limited of Winnipeg which holds the CKJS-AM broadcast license. CRTC decisions are pending on this acquisition and the Charlottetown FM applications.
Newfoundland Capital Corporation Limited has 71 station licenses across Canada.
