SiriusXM Canada Reports Record Revenue in Q1 Fiscal 2014

  • Record Revenue of $76.4 million, up 11.0% year-over-year
  • Adjusted EBITDA** of $19.6 million, up 9.4% year-over-year
  • Net Income of $3.5 million, up 7.3% million year-over-year
  • Cash from operations of $15.6 million, up 3.2% year-over-year
  • Total Subscribers of 2.4 million; year-over-year net additions of 203,200


TORONTO, Jan. 14, 2014 /CNW/ - Sirius XM Canada 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, 2014 (Q1 FY2014) prepared in accordance with International Financial Reporting Standards (IFRS). A summary of IFRS financial results for Q1 FY2014 is attached1. All results are reported in Canadian dollars unless otherwise stated.

Q1 FY2014 Financial Highlights

  • Revenue grew 11.0% to $76.4 million from $68.9 million in Q1 2013
  • Adjusted EBITDA increased 9.4% to $19.6 million from $18.0 million in Q1 2013
  • Net Income increased 7.3% to $3.5 million from a net income of $3.3 in Q1 2013
  • Cash from operations increased 3.2% to $15.6 million, from $15.1 million in Q1 2013
  • Self-Paying Subscribers increased 8.5% to 1.8 million from 1.6 million at November 30, 2013
  • Declared a cash dividend of $0.1050 per Class A Subordinate Voting Share and $0.0350 per Class B Voting Share

"The momentum we built in 2013 has continued into 2014, resulting in a strong start to the new fiscal year," said Mark Redmond, President and CEO, SiriusXM Canada. "It's been eight years since the satellite radio category launched in Canada and we are still generating double revenue digit growth; a true sign of strength of our business. Further, with 2.4 million subscribers, in that eight-year period, we have also established ourselves as Canada's largest subscription-based media business. The momentum in our business and the achievement of these milestones are a testament to the effectiveness of our strategy and the hard work of our team.

Looking ahead to the remainder of the fiscal year and beyond, we see good opportunities to maintain our growth momentum by capitalizing on strong sales in the new vehicle segment, increasing our penetration rate with OEM partners, expanding our pre-owned vehicle program and providing an enhanced overall customer experience with new technologies. Fiscal 2014 promises to be an exciting time for SiriusXM Canada"

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.

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

         
Financial * Q1 FY2014     Q1 FY2013
  (ended Nov 30, 2013)     (ended Nov 30, 2012)
  (Unaudited)     (Unaudited)
Total Revenue $76,436     $68,891
Adjusted EBITDA** $19,638     $17,957
Net Income $3,494     $3,258
         
Operating*        
Self-Paying Subscribers 1,756     1,618
Total Subscribers 2,424     2,221
ARPU $11.53     $11.37
Subscriber Acquisition Cost (SAC) $43     $45
Cost Per Gross Addition (CPGA) $69     $71

* All figures in the table above are in thousands except, ARPU, 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 first quarter, we posted another quarter of double digit revenue growth and continued to deliver a solid increase in our profitability. At over $63 million, our cash position is strong, providing ample liquidity and flexibility to support our exciting growth initiatives as well as for us to continue returning capital to shareholders going forward," said Michael Washinushi, CFO, SiriusXM Canada.

Q1 FY2014 Results Financial Review
For Q1 FY2014 revenue was $76.4 million, up $7.5 million, or 11.0%, from $68.9 million for the same period in 2013.

Q1 FY2014 Adjusted EBITDA improved to $19.6 million, representing a 9.4% increase, or $1.6 million improvement, from Adjusted EBITDA of $18.0 million in Q1 2013. The year-over-year increase was a result of the Company's top-line growth partly offset by increases in cost of revenue and marketing expenses.

SAC was $43 in Q1 FY2014 down from $45 in Q1 2013. The decrease for the quarter was due primarily to a one-time gain of approximately $0.4 million due to the revision of an estimate for the inventory provision for radios sold through the retail channel.

CPGA was $69 in Q1 FY2014 down from $71 in Q1 2013 due to lower SAC and lower marketing costs per gross addition.

In Q1 FY2014, the Company generated $15.6 million in cash from operations, used $2.8 million of cash in investing activities, and generated $1.0 million of cash in financing activities. The Company generated $12.8 million in free cash flow in Q1 FY2014.

As at November 30, 2013, SiriusXM Canada had total cash and cash equivalents and short term investments of $63.0 million, up from $49.2 million as at August 31, 2013.

Conference Call and Webcast Details
SiriusXM Canada will hold a conference call to discuss the Company's FY2014 Q1 results on Wednesday, January 15, 2014 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 Wednesday, January 22, 2014 at midnight. To access the archived conference call, please dial 416-849-0833, or 1-855-859-2056 and enter the reservation code 30346151. 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 EBITDA and Adjusted EBITDA to Operating Income.

       
(In $000's) Q1 FY2014   Q1 FY2013
  (Unaudited)   (Unaudited)
Operating income      8,837         8,629
Depreciation & Amortization       9,908         8,434
EBITDA     18,745       17,063
Stock based compensation         862           794
Fair value adjustments*           31           101
Adjusted EBITDA     19,638       17,975

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

Please see the Company's Management Discussion & Analysis filed January 14, 2014 for more details on the Company's Q1 FY2014 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 audited consolidated statement of operations and comprehensive income. Please see the Company's Management Discussion & Analysis filed January 14, 2014 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 Sirius XM Canada Holdings Inc.'s filings with the Canadian securities regulators, available at www.sedar.com.

About SiriusXM Canada
Sirius XM Canada Holdings Inc. (TSX: XSR) operates as SiriusXM Canada. SiriusXM Canada, with over 2.4 million subscribers, 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 every major sport including the NHL, NFL and MLB.

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 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)
 
At November 30, August 31,
(Canadian dollars) 2013 2013
     
ASSETS    
Current assets    
Cash and cash equivalents 57,922,688 44,078,584
Short-term investments 5,120,135 5,157,798
Accounts receivable 13,961,105 13,359,446
Prepaid expenses 6,181,285 6,778,736
Inventory 312,727 234,349
Total current assets 83,497,940 69,608,913
Long-term prepaid expenses 100,157 100,157
Property and equipment 5,251,632 5,979,911
Intangible assets 146,314,803 152,217,165
Deferred tax assets 52,904,777 54,483,616
Goodwill 96,732,525 96,732,525
Total assets 384,801,834 379,122,287
     
LIABILITIES AND SHAREHOLDERS' EQUITY    
Current liabilities    
Trade and other payables 48,662,210 47,145,257
Due to related parties 10,354,464 9,620,750
Interest payable 6,291,992 2,704,449
Current portion of deferred revenue 142,695,417 144,885,091
Current portion of long-term debt 19,626,626
Dividends payable 13,046,999
Provisions 396,441 1,327,974
Total current liabilities 241,074,149 205,683,521
Deferred revenue 15,861,301 17,105,210
Other long-term liabilities 1,043,169 1,669,229
Due to related parties 1,564,683 2,390,608
Long-term debt 124,326,760 143,707,194
Provisions 353,532 323,112
Total liabilities 384,223,594 370,878,874
     
Shareholders' equity    
Share capital 153,386,048 151,794,596
Contributed surplus 6,457,407 6,161,440
Accumulated deficit (159,265,215) (149,712,623)
Total shareholders' equity 578,240 8,243,413
Total liabilities and shareholders' equity 384,801,834 379,122,287
     



 

CONSOLIDATED INTERIM STATEMENTS OF OPERATIONS AND
COMPREHENSIVE INCOME
(Unaudited)
       
For the three months ended
(Canadian dollars)
  November 30,
2013
November 30,
2012
       
Revenue   76,435,692 68,891,443
       
Operating expenses      
  Operating costs   57,690,811 51,828,746
  Depreciation and amortization   9,907,716 8,434,002
Operating income   8,837,165 8,628,695
       
Finance costs, net      
  Interest income   179,425 166,351
  Interest expense   (3,890,486) (3,973,709)
  Foreign exchange loss   (52,858) (148,664)
  Gain on revaluation of derivative   51,378
Finance costs, net   (3,763,919) (3,904,644)
       
Net income before income tax   5,073,246 4,724,051
Income tax expense   (1,578,839) (1,466,087)
         
Net income and comprehensive income   3,494,407 3,257,964
       
Basic and diluted earnings per share   0.03 0.03
       
 


 
     

CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN SHAREHOLDERS'
EQUITY
(Unaudited)
        Total
For the three months ended Share Contributed   Accumulated   Shareholders'
(Canadian dollars) Capital Surplus deficit Equity
         
         
Balance, September 1, 2012 148,393,493 5,057,501 (108,196,240) 45,254,754
Net income for the period 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
         
         
Balance, September 1, 2013 151,794,596 6,161,440 (149,712,623) 8,243,413
Net income for the period 3,494,407 3,494,407
Stock-based compensation 862,430 862,430
Dividends (13,046,999) (13,046,999)
Stock options exercised 1,591,452 (566,463) 1,024,989
Balance, November 30, 2013 153,386,048 6,457,407 (159,265,215) 578,240
         
 


 
     

CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS
(Unaudited)
       
For the three months ended
(Canadian dollars)
November 30,
2013
November 30,
2012
Cash provided by (used in)    
     
OPERATING ACTIVITIES    
Net income for the period 3,494,407   3,257,964
Add (deduct) items not involving cash    
  Amortization of intangible assets 8,650,080   7,790,009
  Depreciation of property and equipment 1,257,636   643,993
  Income tax expense 1,578,839   1,466,087
  Stock-based compensation 862,430   793,649
  Accrued interest 3,587,543   3,587,543
  Interest accretion 246,190   233,675
  Revaluation of derivatives   (51,378)
  Foreign exchange loss 61,981   106,907
Net change in non-cash working capital and deferred revenue
related to operations
(4,126,385) (2,696,006)
Cash provided by operating activities 15,612,721 15,132,443
     
INVESTING ACTIVITIES    
Purchase of property and equipment (561,968)   (30,602)
Purchase of intangible assets (2,231,638) (1,392,286)
Cash used in investing activities (2,793,606) (1,422,888)
     
FINANCING ACTIVITIES    
Proceeds from exercise of stock options  1,024,989   171,377
Cash provided by financing activities 1,024,989   171,377
     
Net increase in cash and cash equivalents during the period 13,844,104 13,880,932
Cash and cash equivalents, beginning of period 44,078,584 51,034,749
Cash and cash equivalents, end of period 57,922,688 64,915,681
     
 

SOURCE Sirius XM Canada Holdings Inc.

For further information:

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

Aaron Kabucis
TMX Equicom
416-815-0700 ext 230
akabucis@tmxequicom.com