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SiriusXM Canada Delivers Continued Growth with Strong Fiscal 2012 Year End and Fourth Quarter Results

Wednesday, November 14, 2012 11:31 PM


  • Company achieves $20 million in annualized cost synergies
  • Total Subscribers of 2.2 million; year-over-year net additions of 223,100
  • Record annual revenue of $259.6 million
  • Adjusted annual EBITDA** of $46.6 million, up 75.6% year-over-year
  • Free cash flow of $36.6 million, up 751% year-over-year

TORONTO, Nov. 14, 2012 /CNW/ - Canadian Satellite Radio Holdings Inc. ("SiriusXM Canada" or the "Company") (TSX: XSR), parent of Sirius XM Canada Inc., today released audited financial results for the year ended August 31, 2012 (FY2012) and unaudited financial results for the quarter ended August 31, 2012 (Q4 FY2012) prepared in accordance with International Financial Reporting Standards (IFRS). A summary of IFRS financial results for FY2012 and Q4 FY2012 is attached1. To provide a basis of comparison of the performance of the combined entity formed through the business combination of Sirius Canada and XM Canada, the Company has also provided unaudited combined financial information (referred to as "Combined Information") for the comparative year and quarter ended August 31, 2011. All results are reported in Canadian dollars unless otherwise stated.

FY2012 Annual Financial Highlights Compared to Combined Information for 2011

  • Adjusted EBITDA increased 75.6% to $46.6 million from $26.5 million in 2011
  • Self-Paying Subscribers increased 13.8% to 1.6 million from 1.4 million at August 31, 2011
  • Revenue grew 8.9% to $259.6 million from $238.4 million for 2011
  • Free cash flow increased $32.3 million to $36.6 million from $4.3 million for 2011
  • Reported cash and cash equivalents of $51.0 million at August 31, 2012

Q4 FY2012 Financial Highlights Compared to Combined Information for the Comparative Period in 2011

  • Adjusted EBITDA increased 10.5% to $12.2 million from $11.1 million in Q4 2011
  • Revenue grew 11.5% to $68.1 million from $61.1 million in Q4 2011
  • Free cash flow increased $9.3 million to $8.5 million, from $(0.8) million in Q4 2011

"In fiscal 2012, we delivered significant growth in all of our key metrics and further solidified our position as a leader in the Canadian audio entertainment marketplace, with more than 2.2 million subscribers at year end,"said Mark Redmond, President and CEO, SiriusXM Canada."Through a combination of double-digit subscriber growth and effective cost management, we expanded our Adjusted EBITDA margin and drove strong free cash flow. We are extremely pleased with our first-year's performance as a merged entity."

"Looking to fiscal 2013, we are confident our growth will continue as we work to increase in-vehicle penetration rates and better leverage opportunities in the pre-owned car market," Mr. Redmond continued. "In addition, with the recent launch of SiriusXM 2.0 and Best-Of programming, subscribers are now able to access premium content from both Sirius and XM platforms and enjoy our new Internet Radio service and mobile streaming apps. These innovations enhance and extend our subscribers' entertainment experience while positioning the company for continued leadership in the audio entertainment space. We believe these premium services, in addition to the modest price increase of our base subscription rate will contribute to growth in fiscal 2013 and beyond."

_________________________

1 For a complete set of financial results including the accompanying notes please refer to the Company's filings on www.sedar.com

Financial and Operational Summary

Combined Information for 2011 quarterly and annual results assumes the combination of XM Canada and Sirius Canada Inc. occurred as of September 1, 2010. Below, the Company has provided certain non-GAAP measures and industry metrics. These figures are subject to the qualification and assumptions set out in the notes to such results.

         
Financial * IFRS
FY2012
Combined
FY2011
IFRS
Q4 FY2012
Combined
Q4 2011
  (ended August 31, 2012) (ended August 31, 2011) (ended August 31, 2012) (ended August 31, 2011)
  (Audited) (Unaudited) (Unaudited) (Unaudited)
Total Revenue $259,619 $238,389 $68,119 $61,112
Adjusted EBITDA** $46,562 $26,522 $12,220 $11,062
Net Income (Loss) ($4,179) ($17,336) $6,117 $3,500
         
Operating*        
Self-Paying Subscribers 1,584 1,393 1,584 1,393
Total Subscribers 2,206 1,983 2,206 1,983
Subscriber Acquisition Cost (SAC) $49 $54 $46 $50
Cost Per Gross Addition (CPGA) $75 $84 $76 $75

* All figures in the table above are in thousands except, SAC and CPGA
** Adjusted EBITDA is a non-GAAP measure. A reconciliation of operating income (loss) to both EBITDA and Adjusted EBITDA is provided below.

"We are pleased to announce that we have achieved our goal of $20 million in annualized synergies earlier than expected, as a result of our consistent focus on managing costs and optimizing operating efficiencies throughout fiscal 2012," said Michael Washinushi, CFO SiriusXM Canada. "In addition, we further strengthened our balance sheet during the year, reducing our liabilities by $12.1 million and ending Q4 with $51 million in cash and cash equivalents."

Financial review of FY2012 annual and Q4 IFRS results compared to Combined Information for the comparative quarterly and annual periods in 2011

For FY2012, revenue was $259.6 million, up $21.2 million, or 8.9%, from $238.4 million in 2011, entirely as a result of the growth in the Company's revenue-generating subscriber base. Q4 FY2012 revenue was $68.1 million, up $7.0 million, or 11.5%, from $61.1 million for the same period in 2011.

SAC was $49 in FY2012 down from $54 in 2011. SAC for Q4 FY2012 was $46, down from $50 for the same period in 2011. The decrease for the year and the quarter was due to lower subsidies and distribution costs and higher gross additions.

CPGA was $75 in FY2012 down from $84 in 2011 as a result of a decrease in marketing costs achieved through increased operating efficiencies and post-merger cost synergies coupled with higher gross subscriber additions. CPGA for Q4 FY2012 was $76, up slightly from $75 for the same period in 2011 primarily due to an in increase in marketing costs related to customer outreach around the pricing changes and rebranding costs in preparation for the holiday selling season.

FY2012 Adjusted EBITDA improved to $46.6 million, representing a 75.6% increase, or $20.1 million improvement, from Adjusted EBITDA of $26.5 million in 2011. The year-over-year increase was a result of the Company's top-line growth combined with a decrease in marketing, administrative and IT expenses, which was offset, in part, by a higher cost of revenue. Adjusted EBITDA for Q4 FY2012 was $12.2 million, up 10.5%, or $1.1 million, from $11.1 million for the same period in 2011.

In FY2012, SiriusXM Canada generated $41.1 million in cash from operations, used cash of $4.4 million in investing activities and used $11.6 million of cash in financing activities. The Company generated $36.6 million in free cash flow in FY2012. In Q4 FY2012, the Company generated $10.4 million in cash from operations, used $1.9 million of cash in investing activities, and less than $0.1 million in cash was provided by investing activities.The Company generated $8.5 million in free cash flow in Q4 FY2012.

As at August 31, 2012, SiriusXM Canada had total cash and cash equivalents of $51.0 million, up from $42.5 million as at May 31, 2012 and $26.0 million as at August 31, 2011.

Conference Call and Webcast Details

SiriusXM Canada will hold a conference call to discuss the Company's FY2012 annual and Q4 results on Thursday, November 15, 2012 at 8:30 a.m. ET. All interested parties can join the call by dialing 647-427-7450, or 1-888-231-8191. Please dial-in 15 minutes prior to the call to secure a line. The conference call will be archived for replay until Thursday, November 22, 2012 at midnight. To access the archived conference call, please dial 416-849-0833, or 1-855-859-2056 and enter the reservation code 49643642. A live audio webcast of the conference callwill be available at http://www.siriusxm.ca and http://www.newswire.ca/en/webcast/detail/1054673/1146431. Please connect at least 15 minutes prior to the conference call to ensure adequate time for any software download that may be required to join the webcast.  An archived replay of the webcast will be available for 365 days at www.newswire.ca.

Reconciliations

The following is a reconciliation of unaudited EBITDA and unaudited Adjusted EBITDA to Operating Income (loss).

           
(In $000's) IFRS
FY2012
Combined
FY2011
  IFRS
Q4 FY2012
Combined
Q4 2011
  (Audited) (Unaudited)**   (Unaudited) (Unaudited)**
Operating income (loss) 2,844 (18,940)   3,013 (5,698)
Amortization 39,689 32,590   8,699 12,451
EBITDA 42,533 13,650   11,712 6,752
Stock based compensation 1,493 280   333 191
Severance and merger costs 1,383 12,321   2 3,848
Fair value adjustments* 1,152 271   173 271
Adjusted EBITDA 46,562 26,522   12,220 11,062

* Fair value adjustment relates to the reduction in revenue due to valuation of deferred revenue as per purchase price accounting
** In order to align with current reporting requirements, write off of intangibles of $4.2 million in 2011 has been reclassified from severance and merges costs to amortization. 2011 Adjusted EBITDA includes fair value adjustments to align with our current definition as of September 1, 2011.

Please see the Company's Management Discussion & Analysis filed November 14, 2012 for a more detailed explanation of the differences between IFRS actual financial results and the combined information described in this press release. The non-GAAP measures used in this press release should be used in addition to, but not as a substitute for, the analysis provided in the consolidated statement of operations and comprehensive income. Please see the Company's Management Discussion & Analysis filed November 14, 2012 for complete definition of non-GAAP measures.

Forward-Looking Statements

Certain statements included above may be forward-looking in nature. Such statements can be identified by the use of forward-looking terminology such as "expects," "may," "will," "should," "intend," "plan," or "anticipates" or the negative thereof or comparable terminology, or by discussions of strategy. Forward-looking statements include estimates, plans, expectations, opinions, forecasts, projections, targets, guidance or other statements that are not statements of fact, including with respect to future operating performance and merger benefits and costs synergies. Although SiriusXM Canada believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. SiriusXM Canada's forward-looking statements are expressly qualified in their entirety by this cautionary statement. SiriusXM Canada makes no commitment to revise or update any forward-looking statements in order to reflect events or circumstances after the date any such statement is made, except as required by applicable law. Additional information identifying risks and uncertainties is contained in Canadian Satellite Radio Holdings Inc.'s filings with the Canadian securities regulators, available at www.sedar.com.

About SiriusXM Canada

Canadian Satellite Radio Holdings Inc. (TSX: XSR) operates as SiriusXM Canada. SiriusXM Canada is the country's leading audio entertainment company and broadcasts more than 120 satellite radio channels featuring premier sports, news, talk, entertainment and commercial-free music. SiriusXM Canada offers an array of content from the most recognized news and entertainment brands as well as from professional sports leagues including the NHL, NFL, MLB and CFL.

SiriusXM programming is available on a variety of devices including pre-installed and after-market radios in cars, trucks and boats, smartphones and mobile devices, and consumer electronics products for homes and offices. SiriusXM programming is also available online at www.siriusxm.ca and on Apple, BlackBerry and Android-powered mobile devices.

SiriusXM Canada has partnerships with every major automaker and its radio products are available at more than 3,000 retail locations nationwide. To find out more about SiriusXM Canada (TSX: XSR), visit our website at www.siriusxm.ca.


 
CONSOLIDATED BALANCE SHEETS
         
At   August 31, August 31, December 1,
(Canadian dollars)   2012 2011 2010 (note 1)
         
ASSETS        
Current assets        
Cash and cash equivalents   51,034,749 26,015,439 47,610,454
Accounts receivable   12,133,138 10,718,676 8,652,620
Prepaid expenses     3,361,448 2,587,736 1,918,196
Inventory     324,316 2,265,438 1,409,832
Total current assets   66,853,651 41,587,289 59,591,102
Long-term prepaid expenses   79,410 901,563 36,720
Property and equipment     7,617,399 9,680,308 2,636,352
Intangible assets   175,986,331 206,113,620 4,415,866
Deferred tax assets   59,858,394 51,545,684
Goodwill   96,732,525 96,732,525
Total assets   407,127,710 406,560,989 66,680,040
         
LIABILITIES AND SHAREHOLDERS' EQUITY        
Current liabilities        
Trade and other payables   39,085,800 32,870,628 31,239,110
Due to related parties     6,775,601 17,203,492 19,836,681
Interest payable     2,704,449 2,709,537
Current portion of deferred revenue   137,554,399 126,995,705 79,892,903
Provisions     1,285,587 2,123,557 1,126,980
Total current liabilities   187,405,836 181,902,919 132,095,674
Deferred revenue   21,019,320 20,084,379 12,710,409
Other long-term liabilities   6,902,537 9,248,840 200,156
Due to related parties     1,208,332 1,208,332
Deferred tax liabilities   1,133,756
Long-term debt   144,992,819 146,143,284
Provisions     344,112 497,197
Total liabilities   361,872,956 359,084,951 146,139,995
         
Shareholders' equity (deficiency)        
Share capital   148,393,493 147,169,430 36,000,100
Contributed surplus     5,057,501 4,324,032
Accumulated deficit     (108,196,240) (104,017,424) (115,460,055)
Total shareholders' equity (deficiency)   45,254,754 47,476,038 (79,459,955)
Total liabilities and shareholders' equity   407,127,710 406,560,989 66,680,040
         

    Approved by Board of Directors
        (signed) John I. Bitove   (signed) Anthony Viner
        John I. Bitove, Director           Anthony Viner, Director

 
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (DEFICIENCY)
          Total
          Shareholders'
    Share Contributed Accumulated Equity
(Canadian dollars)   Capital Surplus deficit (deficiency)
           
Balance, December 1, 2010   36,000,100 (115,460,055) (79,459,955)
Return of Capital   (36,000,000) (36,000,000)
CSRH shares outstanding at time of merger   154,596,684 154,596,684
CSRH cash deficiency notes   (7,517,868) (7,517,868)
Shares for interest - convertible note   67,999 67,999
Stock options exercised   22,515 (14,361) 8,154
Equity component of convertible debt acquired   1,539,196 1,539,196
Vested stock options at acquisition   2,614,513 2,614,513
Stock-based compensation   184,684 184,684
Net income for the period   17,853,108 17,853,108
Dividends on Class C preferred shares   (1,601,753) (1,601,753)
Dividends on Class C common shares   (5,942,481) (5,942,481)
Part VI.1 tax reversal   1,133,757 1,133,757
Balance, August 31, 2011   147,169,430 4,324,032 (104,017,424) 47,476,038
           
Balance, September 1, 2011   147,169,430 4,324,032 (104,017,424) 47,476,038
Net loss for the year   (4,178,816) (4,178,816)
Stock-based compensation   1,493,400 1,493,400
Stock options exercised   1,224,063 (759,931) 464,132
Balance, August 31, 2012   148,393,493 5,057,501 (108,196,240) 45,254,754
           
           

 
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
         
(Canadian dollars)     Year from
September 1, 2011
to August 31, 2012
Period from
December 1, 2010
to August 31, 2011
         
Revenue     259,619,500 140,917,994
         
Operating expenses        
  Operating costs     215,703,343 117,318,777
  Integration, severance and merger costs       1,383,105 3,501,293
  Depreciation and amortization     39,689,053 12,266,976
Operating income       2,843,999 7,830,948
         
Finance costs, net        
  Interest income     360,906 329,145
  Interest expense     (16,699,532) (3,427,853)
  Foreign exchange loss     (210,372) (315,095)
  Loss on debt payment     (1,908,263)
  Gain on revaluation of derivative     1,213,473
Finance costs, net     (15,335,525) (5,322,066)
         
Net income (loss) before income tax     (12,491,526) 2,508,882
Income tax recovery     8,312,710 15,344,226
Net income (loss) and comprehensive income (loss)     (4,178,816) 17,853,108
         
Basic and diluted (loss) earnings per share       (0.03) 0.19
         
         

 
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Canadian dollars)   Year from
September 1, 2011
to August 31, 2012
Period from
December 1, 2010
to August 31, 2011
Cash provided by (used in)      
       
OPERATING ACTIVITIES      
Net income (loss) for the period   (4,178,816) 17,853,108
Add(deduct) items not involving cash      
  Amortization of intangible assets     36,899,668 11,097,145
  Depreciation of property and equipment     2,789,385 1,169,831
  Deferred tax recovery   (8,312,710)   (15,344,226)
  Stock-based compensation     1,493,400 184,684
  Accrued interest     (5,088) 2,709,537
   Interest accretion     950,583 129,234
  Loss on repayment of debt   1,908,263
  Share issued for interest settlement     67,999
  Revaluation of derivative   (1,213,473)
  Unrealized foreign exchange losses (gains)   3,010 7,879
Net change in non-cash working capital and deferred revenue related to operations   12,649,125   (12,046,186)
Cash provided by operating activities   41,075,084 7,737,268
       
INVESTING ACTIVITIES      
Cash acquired on acquisition   2,223,112
Proceeds on sale of property and equipment   1,757
Purchase of property and equipment   (728,425) (180,198)
Purchase of intangible assets   (3,700,491) (1,931,242)
Cash (used in) provided by investing activities   (4,428,916) 113,429
       
FINANCING ACTIVITIES      
Distributions to shareholders     (44,723,690)
Proceeds from exercise of stock options      464,132 8,154
Proceeds from debt   62,000,000
Debt financing fees   (4,118,803)
Repayments of debt   (917,700)   (42,611,373)
Payment of related party promissory notes   (11,173,290)
       
Cash (used in) financing activities   (11,626,858)   (29,445,712)
       
Net increase (decrease) in cash and cash equivalents during the period     25,019,310   (21,595,015)
Cash and cash equivalents, beginning of period     26,015,439 47,610,454
Cash and cash equivalents, end of period     51,034,749 26,015,439



 

 

 

SOURCE: SiriusXM Canada

Morlan Reddock 
Sirius XM Canada 
416-513-7418 
morlan.reddock@siriusxm.ca 

Kristen Dickson
TMX Equicom
416-815-0700 ext 273
kdickson@tmxequicom.com

(Source: CNW )
(Source: Quotemedia)

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