SiriusXM Canada Reports Continued Growth in Fiscal 2012 Second Quarter

  • Record  total Subscribers of 2.02 million; year-over-year net additions of 192,600
  • Record Self-Paying Subscribers of 1.45 million; year-over-year net additions of 161,900
  • Record revenue of $63.8 million
  • Adjusted EBITDA** of $11.9 Million, up 152.4% year-over-year
  • Cash from operating activities of $12.0 million
  • Fixed cash operating expense1 reduced by 11.2% year-over-year

TORONTO, April 12, 2012 /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 three- and six-month periods ended February 29, 2012 (Q2 and year-to-date FY2012, respectively) prepared in accordance with International Financial Reporting Standards (IFRS). A summary of IFRS financial results for Q2 and year-to-date FY2012 is attached2. To provide a basis of comparison of the performance of the newly combined entity formed through the merger of Sirius Canada and XM Canada, the Company has also provided unaudited combined financial information (referred to as "Combined Information") for the comparative three- and six-month periods ended February 28, 2011. All results are reported in Canadian dollars unless otherwise stated.

Q2 FY2012 Highlights Compared to Combined Information for the Comparative Quarter in 2011

  • Adjusted EBITDA increased 152.4% to $11.9 million from $4.7 million in 2011
  • Generated $12.0 million in cash from operations in the quarter
  • Self-Paying Subscribers increased 12.5% to 1.45 million from 1.29 million at February 28, 2011
  • Revenue grew 9.4% to $63.8 million from $58.3 million in 2011
  • Fixed cash operating expense decreased 11.2% to $16.9 million from $19.1 million in 2011
  • Repaid $11.2 million promissory note to former shareholders of Sirius Canada
  • Reported cash and cash equivalents of $36.1 million at February 29, 2012
  • Subsequent to quarter end, completed a secondary offering on a bought deal basis for an aggregate of 8,000,000 Class A Subordinate Voting Shares of the Company

Year-to-date FY2012 Highlights Compared to Combined Information for the Comparative Period in 2011

  • Adjusted EBITDA increased 152.2% to $24.8 million from $9.8 million for same period in 2011
  • Generated $22.0 million in cash from operations during the six-months ended February 29, 2012
  • Revenue grew 8.0% to $126.9 million from $117.5 million for same period in 2011
  • Fixed cash operating expense decreased 15.3% to $32.2 million from $38.0 million for same period in 2011

"With another quarter of strong results, we continue to be one of the fastest growing media companies in Canada," said Mark Redmond, President and CEO, SiriusXM Canada. "In Q2, we expanded our subscriber base, delivered record revenue and realized further merger-related cost synergies. As a result, we more than doubled Adjusted EBITDA and generated significant cash from operations. In addition, we completed a secondary offering subsequent to quarter-end, substantially increasing the size and liquidity of the Company's publicly traded float. Looking ahead, we expect to continue to report strong Adjusted EBITDA, which in combination with our low capital expenditure requirements, positions us to consistently deliver free cash flow."
____________________________
1 Please see the Company's MD&A for a definition of Fixed cash operating expense
2 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 Q2 2011 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
Q2 FY2012
Combined
Q2 2011
IFRS
Year-to-date
FY2012
Combined
Year-to-date
FY2011
  (ended Feb 29, 2012)   (ended Feb 28, 2011)   (ended Feb 29, 2012)   (ended Feb 28, 2011)
  (Unaudited) (Unaudited) (Unaudited) (Unaudited)
Total Revenue $63,774 $58,302 $126,885 $117,527
Adjusted EBITDA** $11,903 $4,715 $24,782 $9,826
Net Income (Loss) ($2,695) ($5,744) ($6,107) ($11,680)
         
Operating*        
Self-Paying Subscribers 1,454 1,293 1,454 1,293
Total Subscribers 2,016 1,824 2,016 1,824
Subscriber Acquisition Cost (SAC) $46 $55 $50 $59
Cost Per Gross Addition (CPGA) $74 $92 $78 $95
         
* 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.


Financial review of Q2 and year-to-date fiscal 2012 IFRS results compared to Combined Information for the comparative three and six-month periods in 2011

For Q2 FY2012, revenue was $63.8 million, up $5.5 million, or 9.4% from $58.3 million for the comparative quarter in 2011, primarily as a result of the growth in the Company's revenue-generating subscriber base. Year-to-date FY2012 revenue was $126.9 million, up $9.4 million, or 8.0% from $117.5 million for the same period in 2011.

SAC was $46 in Q2 FY2012 down from $55 for the comparative quarter in 2011. The decrease was mainly attributable to lower subsidies and distribution costs in the aftermarket channel, as well as a reduction in promotional spending due to cost synergies. SAC for year-to-date FY2012 was $50, down from $59 for the same period in 2011.

CPGA was $74 in Q2 FY2012, a decrease from $92 for the comparative quarter in 2011. This decline over the comparable quarter in 2011 was a result of lower subsidies and distribution costs along with a decrease in marketing costs, achieved through increased operating efficiencies and post-merger cost synergies. CPGA for year-to-date FY2012 was $78, down from $95 for the same period in 2011.

Q2 FY2012 Adjusted EBITDA improved to $11.9 million, representing a 152.4% increase, or $7.2 million improvement, from Adjusted EBITDA of $4.7 million for the comparative quarter in 2011. This increase over the comparable quarter in 2011 was primarily a result of the Company's top-line growth combined with a decrease in operating expenses driven by increased efficiencies and post-merger cost synergies in areas such as general and administrative, and marketing. Adjusted EBITDA for year-to-date FY2012 was $24.8 million, up 152.2%, or $15.0 million, from $9.8 million for the same period in 2011.

During the quarter, the Company generated $12.0 million in cash from operations and used cash of $0.2 million in investing activities and $10.9 million in financing activities. In the quarter, the Company used $11.2 million for repayment of a promissory note to shareholders of Sirius Canada, which was offset by $0.3 million in proceeds from the exercise of stock options. For year-to-date FY2012, the Company generated $22.0 million in cash from operations and used $1.1 million in investing activities and $10.8 million in financing activities. As at February 29, 2012, SiriusXM Canada had total cash and cash equivalents of $36.1 million, up from $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 Q2 FY2012 results on Thursday, April 12, 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, April 19, 2012 at midnight. To access the archived conference call, please dial 416-849-0833, or 1-855-859-2056 and enter the reservation code 66040799. A live audio webcast of the conference call in addition to a slide presentation 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 (loss).

(In $000's) IFRS
Q2 2012
Combined
Q2 2011
    IFRS
Year-to-date
FY2012
Combined
Year-to-date
FY2011
  (Unaudited) (Unaudited)     (Unaudited) (Unaudited)
Operating income (loss) 750 (5,075)     1,031 (9,456)
Amortization 10,044 6,741     20,984 13,717
EBITDA 10,794 1,666     22,015 4,261
Severance and merger costs 359 3,026     1,277 5,501
Stock based compensation 433 23     827 63
Fair value adjustments* 317       663  
Adjusted EBITDA 11,903 4,715     24,782 9,826
             
* 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 April 11, 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 April 11, 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.sirius.ca and www.xmradio.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 SHEET
(Unaudited)

As at   February 29, August 31,
(Canadian dollars)   2012 2011
       
ASSETS      
Current assets      
Cash and cash equivalents   36,074,320 26,015,439
Accounts receivable   10,023,251 10,718,676
Prepaid expenses   3,322,302 2,587,736
Inventory   942,257 2,265,438
Total current assets   50,362,130 41,587,289
Long-term prepaid expenses   98,594 901,563
Property and equipment   8,816,597 9,680,308
Intangible assets   187,985,206 206,113,620
Deferred tax assets   53,162,696 51,545,684
Goodwill   96,732,525 96,732,525
Total assets   397,157,748 406,560,989
       
LIABILITIES AND SHAREHOLDERS' EQUITY      
Current liabilities      
Trade and other payables   37,884,450 32,870,628
Due to related parties   6,317,293 17,203,492
Interest payable   2,691,342 2,709,537
Current portion of deferred revenue   127,807,350 126,995,705
Current portion of long-term debt   910,340
Provisions   1,703,831 2,123,557
Total current liabilities   177,314,606 181,902,919
Deferred revenue   20,489,747 20,084,379
Other long-term liabilities   9,358,587 9,248,840
Due to related parties   1,208,332 1,208,332
Long-term debt   145,731,577 146,143,284
Provisions   464,453 497,197
Total liabilities   354,567,302 359,084,951
       
Shareholders' equity      
Share capital   148,204,069 147,169,430
Contributed surplus   4,510,428 4,324,032
Accumulated deficit   (110,124,051) (104,017,424)
Total shareholders' equity   42,590,446 47,476,038
Total liabilities and shareholders' equity   397,157,748 406,560,989
       
       

CONSOLIDATED INTERIM STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(Unaudited)

    Three Months ended (note 1)   Six months ended (note 1)
    February 29, May 31,   February 29, May 31,
(Canadian dollars)   2012 2011   2012 2011
             
Revenue   63,774,132 42,953,260   126,885,377 85,452,356
             
Operating expenses            
  Operating costs   52,621,177 35,703,724   103,593,104 72,607,395
  Severance and merger costs   358,939 444,516   1,276,962 1,475,318
  Depreciation and amortization   10,044,378 795,145   20,984,463 1,747,621
Operating income   749,638 6,009,875   1,030,848 9,622,022
             
Finance costs, net            
  Interest income   81,381 131,393   125,029 248,408
  Interest expense   (4,361,836)   (8,705,148)
  Foreign exchange gain / (loss)   345,474 (18,612)   (156,575) (171,191)
  Gain / (Loss) on revaluation of derivative   10,714   (17,793)
Finance costs   (3,924,267) 112,781   (8,754,487) 77,217
             
Net income (loss) before income tax   (3,174,629) 6,122,656   (7,723,639) 9,699,239
Income tax (expense) recovery   479,759   1,617,012
Net income (loss) and comprehensive income (loss)   (2,694,870) 6,122,656   (6,106,627) 9,699,239
             
Basic and fully diluted (loss) earnings per share   (0.02) 0.08   (0.05) 0.12
             
             

CONSOLIDATED INTERIM STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (DEFICIENCY)
(Unaudited)

          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)
Total comprehensive income for the period   9,699,239 9,699,239
Dividends   (1,436,055) (1,436,055)
Part VI.1 tax   (119,671) (119,671)
Balance, May 31, 2011   36,000,100 (107,316,542) (71,316,442)
           
Balance, September 1, 2011   147,169,430 4,324,032 (104,017,424) 47,476,038
Total comprehensive (loss) for the period   (6,106,627) (6,106,627)
Stock-based compensation   827,127 827,127
Stock options exercised   1,034,639 (640,731) 393,908
Balance, February 29, 2012   148,204,069 4,510,428 (110,124,051) 42,590,446
           
           

CONSOLIDATED INTERIM STATEMENT OF CASH FLOWS
(Unaudited)

    Three Months ended (note 1)   Six months ended (note 1)
    February 29, May 31,   February 29, May 31,
(Canadian dollars)   2012 2011   2012 2011
Cash provided by (used in)            
             
OPERATING ACTIVITIES            
Net income (loss) for the period   (2,694,870) 6,122,656   (6,106,627) 9,699,239
Add(deduct) items not involving cash            
  Amortization of intangible assets   9,376,466 548,387   19,527,649 1,255,829
  Depreciation of property and equipment   667,913 246,758   1,456,814 491,792
  Future income tax recovery   (479,759)   (1,617,012)
  Stock-based compensation   433,206   827,127
  Accrued interest   (3,635,519)   (18,195)
  Interest accretion   255,847   489,340
  Revaluation of derivative   (10,714)   17,793
  Unrealized foreign exchange losses (gains)   (257,680)   (154,424)
Net change in non-cash working capital and
deferred revenue related to operations
  8,324,567 506,235   7,561,533 (2,036,499)
Cash provided by operating activities   11,979,457 7,424,036   21,983,998 9,410,361
             
INVESTING ACTIVITIES            
Purchase of property and equipment   (83,751) (1,296)   (595,052) (115,066)
Purchase of intangible assets   (111,926) (774,469)   (550,683) (1,449,039)
Cash used in investing activities   (195,677) (775,765)   (1,145,735) (1,564,105)
             
FINANCING ACTIVITIES            
Payment of related party promissory notes   (11,173,290)   (11,173,290)
Proceeds from exercise of stock options   281,796   393,908
Cash provided by financing activities   (10,891,494)   (10,779,382)
             
Net increase in cash and cash equivalents during the period   892,286 6,648,271   10,058,881 7,846,256
Cash and cash equivalents, beginning of period   35,182,034 48,808,439   26,015,439 47,610,454
Cash and cash equivalents, end of period   36,074,320 55,456,710   36,074,320 55,456,710
             

 

 

 

For further information:

Investors 
Morlan Reddock 
416-408-6899 
investor.relations@xmradio.ca

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