SiriusXM Canada Delivers Strong Growth in Q1 Fiscal 2013

  • Record quarterly revenue of $68.9 million
  • Record Adjusted EBITDA** of $18.0 million, up 39.4% year-over-year
  • Net Income of $3.3 million, up $6.7 million year-over-year
  • Record free cash flow of $13.7 million, up 51.4% year-over-year
  • Total Subscribers of 2.2 million; year-over-year net additions of 206,400

TORONTO, Jan. 14, 2013 /CNW/ - Canadian Satellite Radio Holdings Inc. ("SiriusXM Canada" or the "Company") (TSX: XSR), parent of Sirius XM Canada Inc., today released unaudited financial results for the quarter ended November 30, 2012 (Q1 FY2013) prepared in accordance with International Financial Reporting Standards (IFRS)1. A summary of IFRS financial results for Q1 F2013 is attached. All results are reported in Canadian dollars unless otherwise stated.

Q1 FY2013 Highlights

  • Adjusted EBITDA increased 39.4% to $18.0 million from $12.9 million in Q1 FY2012
  • Self-Paying Subscribers increased 14.3% to 1.6 million from 1.4 million at November 30, 2011
  • Revenue grew 9.2% to $68.9 million from $63.1 million for Q1 FY2012
  • Net income increased to $3.3 million from a loss of $3.4 million in Q1 FY2012
  • Free cash flow increased 51.4% to $13.7 million from $9.1 million for Q1 FY2012
  • Cash and cash equivalents of $64.9 million at November 30, 2012
  • Declared a special cash dividend of $0.0825 per Class A Subordinated Voting Share and $0.0275 per Class B Voting Share
  • Initiated a quarterly dividend of $0.0825 per Class A Share and Class C Non-Voting Shares and $0.0275 per Class B Share
  • Obtained a six-year broadcast license renewal from the CRTC
  • Launched Best Of programming, enabling subscribers to access premium content from both the Sirius and XM platforms
  • Launched enhanced Internet Radio service and mobile listening Apps, that also give subscribers access to on-demand functionality

"Fiscal 2013 is off to an excellent start," said Mark Redmond, President and CEO, SiriusXM Canada. "We generated record revenue, Adjusted EBITDA and free cash flow, and received a six-year broadcast license renewal from the CRTC. In addition, with the launch of our Best Of programming, new Internet Radio service and mobile streaming Apps in the quarter, we enhanced and extended our service offering, better positioning the Company for long-term growth. We believe the combination of these premium services, growing new vehicle sales, higher in-vehicle penetration rates and our efforts to better leverage opportunities in the pre-owned car market will fuel our continued success."

___________________________
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
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 * Q1 FY2013 Q1 FY2012
  (ended November 30, 2012) (ended November 30, 2011)
  (Unaudited) (Unaudited)
Total Revenue $68,891 $63,111
Adjusted EBITDA** $17,957 $12,880
Net Income (Loss) $3,258 ($3,412)
     
Operating*    
Self-Paying Subscribers 1,618 1,416
Total Subscribers 2,221 2,014
Subscriber Acquisition Cost (SAC) $45 $54
Cost Per Gross Addition (CPGA) $70 $83

* 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 to both EBITDA and Adjusted EBITDA is provided below.

"In the quarter, we continued to demonstrate the strong cash generation capabilities of the business, which translated into the announcement of a special dividend and the initiation of a quarterly dividend," said Michael Washinushi, CFO SiriusXM Canada. "We have a stable recurring revenue stream and can clearly manage our costs without sacrificing growth. We remain confident in the Company's ongoing financial strength, operational efficiency and ability to grow free cash flow."

Q1 FY2013 Financial Review

For Q1 FY2013, revenue was $68.9 million, up $5.8 million, or 9.2%, from $63.1 million in Q1 FY2012 as a result of the continued growth in the Company's revenue-generating subscriber base.

SAC was $45 in Q1 FY2013, down from $54 in Q1 FY2012. The year-over-year improvement was due to lower subsidy costs and higher gross additions.

CPGA was $70 in Q1 FY2013, down from $83 in Q1 FY2012.  The year-over-year improvement reflects lower subsidy costs and higher gross subscriber additions, which were partially offset by slightly higher marketing costs.

Q1 FY2013 Adjusted EBITDA improved to $18.0 million, representing a 39.4%, or $5.1 million, increase, from Adjusted EBITDA of $12.9 million in Q1 FY2012. The year-over-year improvement was a result of the Company's top-line growth, which was offset, in part, by a slight year-over-year increase in operating expenses due to a larger subscriber base.

In Q1 FY2013, SiriusXM Canada generated $13.7 million in free cash flow. The Company generated $15.1 million in cash from operations, used cash of $1.4 million in investing activities and generated $0.2 million of cash in financing activities. Comparatively, in Q1 FY2012, SiriusXM Canada generated $9.1 million in free cash flow. The Company generated $10.0 million in cash from operations, used cash of $0.9 million in investing activities and generated $0.1 million of cash in financing activities.

As at November 30, 2012, SiriusXM Canada had total cash and cash equivalents of $64.9 million, up from $51.0 million at August 31, 2012.

Conference Call and Webcast Details
SiriusXM Canada will hold a conference call to discuss the Company's Q1 FY2013 results on Tuesday, January 15, 2013 at 8:00 a.m. ET. All interested parties can join the call by dialling 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 Tuesday, January 22, 2013 at midnight. To access the archived conference call, please dial 416-849-0833, or 1-855-859-2056 and enter the reservation code 81448032. A live audio webcast of the conference call will be available at http://www.siriusxm.ca and www.newswire.ca. 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.

       
(In $000's) Q1 FY2013 Q1 FY2012  
  (Unaudited) (Unaudited)  
Operating income 8,629 281  
Amortization 8,434 10,940  
EBITDA 17,063 11,221  
Stock based compensation 794 394  
Integration, severance and merger costs - 918  
Fair value adjustments* 101 346  
Adjusted EBITDA 17,957 12,880  

* Fair value adjustment relates to the reduction in revenue due to the valuation of deferred revenue as per purchase price accounting

Please see the Company's Management Discussion & Analysis filed January 14, 2013 for more details on the Company's Q1 FY2013 results. 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 unaudited consolidated statement of operations and comprehensive income. Please see the Company's Management Discussion & Analysis filed January 14, 2013 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 the payment of dividends in the future and future performance. 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, including with respect to the ability of the Company to pay dividends in the future. 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 INTERIM BALANCE SHEETS
(Unaudited)

 
 
  November 30, August 31,
At 2012 2012
     
ASSETS    
Current assets    
Cash and cash equivalents 64,915,681 51,034,749
Accounts receivable   9,115,231 12,133,138
Prepaid expenses   2,487,868 3,361,448
Inventory 266,797 324,316
Total current assets 76,785,577 66,853,651
Long-term prepaid expenses 73,390 79,410
Property and equipment   7,004,008 7,617,399
Intangible assets 170,159,759 175,986,331
Deferred tax assets 58,392,307 59,858,394
Goodwill 96,732,525 96,732,525
Total assets 409,147,566 407,127,710
     
LIABILITIES AND SHAREHOLDERS' EQUITY    
Current liabilities    
Trade and other payables 36,909,753 39,085,800
Due to related parties   7,377,591 6,775,601
Interest payable   6,291,992 2,704,449
Current portion of deferred revenue 135,172,973 137,554,399
Dividends payable 20,333,586
Provisions   1,435,728 1,285,587
Total current liabilities 207,521,623 187,405,836
Deferred revenue 20,229,088 21,019,320
Other long-term liabilities   5,465,686 6,902,537
Due to related parties   1,208,332 1,208,332
Long-term debt 145,226,495 144,992,819
Provisions 352,184 344,112
Total liabilities 380,003,408 361,872,956
     
Shareholders' equity    
Share capital 148,704,655 148,393,493
Contributed surplus   5,711,365 5,057,501
Accumulated deficit (125,271,862) (108,196,240)
Total shareholders' equity 29,144,158 45,254,754
Total liabilities and shareholders' equity 409,147,566 407,127,710
       

 

CONSOLIDATED INTERIM STATEMENTS OF OPERATIONS AND OTHER
COMPREHENSIVE INCOME (LOSS)
(Unaudited)
For the three month ended   November 30,
2012
November 30,
2011
       
Revenue   68,891,443 63,111,245
       
Operating expenses      
 Operating costs   51,828,746 50,971,927
 Severance and merger costs   918,023
 Depreciation and amortization   8,434,002 10,940,085
Operating income   8,628,695 281,210
       
Finance costs, net      
 Interest income   166,351 43,648
 Interest expense   (3,973,709) (4,343,312)
 Foreign exchange loss   (148,664) (502,049)
 Gain (loss) on revaluation of derivative   51,378 (28,507)
Finance costs   (3,904,644) (4,830,220)
       
Net income (loss) before income tax   4,724,051 (4,549,010)
Income tax (expense) recovery   (1,466,087) 1,137,253
Net income (loss) and comprehensive income (loss)   3,257,964 (3,411,757)
       
Basic and fully diluted (loss)  Income per share   0.03 (0.03)

CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN SHAREHOLDERS'
EQUITY
(Unaudited)
          Total
  Share Contributed Accumulated Shareholders'
For the three months ended Capital Surplus deficit Equity
         
         
Balance, September 1, 2011 147,169,430 4,324,032 (104,017,424) 47,476,038
Total comprehensive (loss) for the year (3,411,757) (3,411,757)
Stock-based compensation 393,921 393,921
Stock options exercised 297,375 (185,263) 112,112
Balance, November 30, 2011 147,466,805 4,532,690 (107,429,181) 44,570,314
         
         
Balance, September 1, 2012 148,393,493 5,057,501 (108,196,240) 45,254,754
Total comprehensive income for the year 3,257,964 3,257,964
Stock-based compensation 793,649 793,649
Dividends (20,333,586) (20,333,586)
Stock options exercised 311,162 (139,785) 171,377
Balance, November 30, 2012 148,704,655 5,711,365 (125,271,862) 29,144,158

SOURCE: SiriusXM Canada

For further information:

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

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