Astral shows continued growth in the second quarter of Fiscal 2011

  • 7% increase in revenue and 3% increase in EBITDA1
  • 3% increase in net earnings and 3% increase in diluted EPS

MONTREAL, April 14 /CNW Telbec/ - Astral Media Inc. (TSX: ACM.A ACM.B) today reported its financial results for the second quarter ended February 28, 2011, which saw continued growth in revenues, EBITDA1, net earnings, EPS, and cash flow from operations3.

Consolidated revenues for the second quarter totalled $232.7 million, a 7% increase over the $218.3 million reported last year for the same period. For the second quarter, EBITDA1 rose to $64.3 million from $62.6 million for the same period last year, a 3% increase. Consolidated net earnings for the second quarter grew 3% to $34.8 million from $33.6 million for the same period last year, while diluted earnings per share grew 3% to $0.61 from $0.59 per share last year. Cash flow from operations3 rose by 6% to $48.9 million for the second quarter compared to $46.3 million for the same period last year.

For the first half of the year, consolidated revenues totalled $499.8 million, an increase of 7% over the $469.0 million recorded last year for the same period. EBITDA1 for the first six months grew by 4% to $153.6 million from $147.8 million2 for the same period last year. Consolidated net earnings for the first six months of Fiscal 2011 increased by 8% over last year to $88.1 million ($1.53 per share) from $81.9 million2, 4 ($1.43 per share2, 4) last year. Cash flow from operations3 rose by 9% to $115.9 million for the first six months of the year compared to $106.2 million for the corresponding period last year.

"I am pleased by the growth we experienced in the second quarter of Fiscal 2011 and am delighted that all our business units continue to contribute to our performance quarter after quarter," said Ian Greenberg, President and Chief Executive Officer. "While benefiting from an improved economic landscape, we maintain our focus on gaining additional operational efficiencies throughout the organization."

FINANCIAL AND OPERATIONAL HIGHLIGHTS

Corporate

  • The appointment of Jacques Parisien to the new position of Executive Vice-President and Chief Operating Officer of the Company;
  • A 50% increase of its annual dividend - to $0.75 per share - on all Class A and Class B shares;
  • The renewal of the Company's Normal Course Issuer Bid to repurchase up to 5% of outstanding Class A Shares and Class B Shares;
  • The repurchase of 762,300 Class A Shares for a consideration of $31.4 million in the second quarter under the Company's Normal Course Issuer Bid.

Television

  • Revenue growth of 7% for the quarter (7% growth for the six-month period);
  • 17% advertising revenue growth for the quarter (16% growth for the six-month period) and 5% growth in subscriber-related revenues for the quarter (4% growth for the six-month period);
  • 5% increase for the quarter in the number of pay-TV subscribers for The Movie Network and Super Écran to 1.902 million from 1.819 million;
  • EBITDA1 growth of 5% for the quarter (6% growth for the six-month period2);
  • Subsequent to the end of the second quarter, announcement of the launch, on June 1st, of the advertiser-supported and multiplatform branded network Disney XD, targeting kids aged 6-14.

Radio

  • Revenue growth of 3% for the quarter (3% growth for the six-month period);
  • EBITDA1 decline of 5% for the quarter (5% decline for the six-month period2).

Out-of-Home

  • Revenue growth of 17% for the quarter (23% growth for the six-month period);
  • EBITDA1 growth of 17% for the quarter (27% growth for the six-month period);
  • Addition of a network of 80 new Aero Vertical digital faces inside the Montréal-Trudeau International Airport;
  • Subsequent to the end of the second quarter, announcement of the addition of three new digital faces to the Montréal area network and four new digital faces in the Toronto area, expanding Astral Out-of-Home's national Digital Network to 39 faces.

The unaudited interim consolidated financial statements with related notes and Management's Discussion and Analysis are available on the Company's website: www.astral.com.

There will be a conference call with analysts and media at 11:00 a.m. on Thursday, April 14, 2011. To access the conference call dial 1-800-731-5319. The conference call will also be broadcast live and archived for a three-month period on the Astral website at www.astral.com.

Astral is one of Canada's largest media companies. It operates several of the country's most popular pay and specialty television, radio, out-of-home advertising and digital media properties. Astral plays a central role in community life across the country by offering diverse, rich and vibrant programming that meets the tastes and needs of consumers and advertisers. To learn more about Astral, visit www.astral.com.

This press release contains certain forward-looking statements concerning the future performance of the Company. These forward-looking statements are based on current expectations. We caution that all forward-looking information is inherently uncertain and actual results may differ materially from the assumptions, estimates or expectations reflected or contained in the forward-looking information, and that actual future performance will be affected by a number of factors, including technological change, economic conditions, regulatory change, competitive factors and changes in accounting rules or standards, many of which are beyond the Company's control. Except as required under applicable securities regulations, we disclaim any intention or obligation to update or revise any forward-looking statements.

  1. EBITDA is defined as earnings before interest, taxes, depreciation and amortization. See Appendix 1.
  2. Excluding the $11.6 million of Part II licence fees accrual reversal recorded in the first quarter of Fiscal 2010 ($8.0 million net of income taxes or $0.14 per share, $3.2 million in Television and $8.4 million in Radio). See details in the Management's Discussion and Analysis.
  3. See Appendix 1.
  4. Excluding the impact of an $8.4 million ($0.15 per share) non-cash future income tax recovery recorded in the first quarter of Fiscal 2010 resulting from future income tax rate changes enacted by the Ontario Government. See Appendix 1 and details in the Management's Discussion and Analysis.



ASTRAL MEDIA INC.
Interim Consolidated Statements of Earnings
for the periods ended February 28, 2011 and 2010
(in thousands of Canadian dollars except for per-share data)
(unaudited)
         
    3 months   6 months
    2011     2010   2011     2010
                         
Revenues   $ 232,678   $ 218,281   $ 499,771   $ 468,966
                         
Operating expenses     168,403     155,694     346,149     321,118
Part II licence fees accrual reversal     -     -     -     (11,552)
                         
EBITDA (1)     64,275     62,587     153,622     159,400
                         
  Depreciation     7,020     6,287     13,837     12,427
  Amortization of intangible and non-current assets     2,301     1,147     4,514     2,591
  Interest expense, net     5,393     6,614     11,023     13,803
                         
Earnings before income taxes     49,561     48,539     124,248     130,579
                         
Income tax provision before undernoted     14,784     14,896     36,164     40,692
Future income tax recovery resulting from income tax rate changes     -     -     -     (8,397)
      14,784     14,896     36,164     32,295
                         
Net earnings   $ 34,777   $ 33,643   $ 88,084   $ 98,284
                         
Earnings per share                        
  - Basic   $ 0.61   $ 0.60   $ 1.55   $ 1.74
  - Diluted   $ 0.61   $ 0.59   $ 1.53   $ 1.72
                         
                         
                             
(1) See Appendix 1.                          
                           

ASTRAL MEDIA INC.                                                                                               
Interim Consolidated Statements of Cash Flows
for the periods ended February 28, 2011 and 2010
(in thousands of Canadian dollars)
(unaudited)
         
    3 months   6 months
      2011     2010     2011     2010
Cash and cash equivalents provided by (used for):                        
                         
OPERATING ACTIVITIES                        
  Net earnings   $ 34,777   $ 33,643   $ 88,084   $ 98,284
                           
  Non-cash charges (credits):                        
    Part II licence fees accrual reversal     -     -     -     (11,552)
    Stock-based compensation costs     1,701     1,968     4,009     4,385
    Depreciation and amortization     9,321     7,434     18,351     15,018
    Imputed interest on other non-current liabilities     578     524     1,032     1,083
    Amortization of deferred financing costs     172     171     343     342
    Future income tax expense net before undernoted     2,334     2,590     4,067     7,048
    Future income tax recovery resulting from income tax rate changes     -     -     -     (8,397)
                         
Cash flow from operations (1)     48,883     46,330     115,886     106,211
                         
                         
  Net change in non-cash operating items     10,301     9,493     (20,508)     (23,311)
                         
Cash provided by operating activities     59,184     55,823     95,378     82,900
                         
                         
                         
INVESTING ACTIVITIES                        
  Additions to property, plant and equipment     (7,693)     (11,039)     (17,687)     (20,083)
  Additions to other intangible and non-current assets     (5,061)     (4,042)     (7,849)     (5,573)
Cash used for investing activities     (12,754)     (15,081)     (25,536)     (25,656)
                         
FINANCING ACTIVITIES                        
  Repayment of long-term debt     -     (30,000)     (10,000)     (40,000)
  Stock options exercised     7,787     7,274     12,603     8,114
  Shares repurchased     (31,440)     (858)     (31,440)     (858)
  Dividends     (21,371)     (14,141)     (21,375)     (14,145)
Cash used for financing activities     (45,024)     (37,725)     (50,212)     (46,889)
                         
Net change in cash     1,406     3,017     19,630     10,355
Cash - beginning of period     29,769     30,438     11,545     23,100
Cash - end of period   $ 31,175   $ 33,455   $ 31,175   $ 33,455
                         
                             
(1) See Appendix 1.  

             
ASTRAL MEDIA INC.  
Interim Consolidated Balance Sheets as at
(in thousands of Canadian dollars)
(unaudited)
       
  February 28,   August 31,
  2011   2010
           
ASSETS          
           
Current          
  Cash $ 31,175   $ 11,545
  Accounts receivable   152,955     169,240
  Program and film rights   111,696     106,084
  Prepaid expenses and other current assets   37,402     29,451
    333,228     316,320
           
Program and film rights   72,045     65,923
Property, plant and equipment   186,029     179,938
Broadcast licences   1,413,059     1,413,059
Goodwill   356,945     356,945
Other intangible and non-current assets   82,168     79,362
Future income tax assets   58,189     66,005
           
  $ 2,501,663   $ 2,477,552
           
           
LIABILITIES          
           
Current          
  Accounts payable and accrued liabilities $ 110,333   $ 138,119
  Income taxes payable   12,463     16,654
  Program and film rights payable   84,667     64,908
  Future income tax liabilities   2,034     5,329
    209,497     225,010
           
Long-term debt   578,790     588,447
Future income tax liabilities   241,324     240,382
Program and film rights payable   14,868     12,668
Other non-current liabilities   59,298     62,302
Derivative financial instruments   4,599     9,699
    1,108,376     1,138,508
           
SHAREHOLDERS' EQUITY          
           
Capital stock   776,979     768,762
Contributed surplus   13,281     17,200
Retained earnings   606,360     560,119
Accumulated other comprehensive loss   (3,333)     (7,037)
    603,027     553,082
    1,393,287     1,339,044
           
  $ 2,501,663   $ 2,477,552


                       
ASTRAL MEDIA INC.
Business Segments
for the periods ended February 28, 2011 and 2010
(in thousands of Canadian dollars)
(unaudited)
                       
  3 months   6 months
      2011     2010         2011     2010
                       
REVENUES                      
                       
Television $ 138,879   $ 129,448   $ 288,563   $ 270,675
Radio   76,396     73,906     168,027     163,071
Out-of-Home   17,403     14,927     43,181     35,220
                       
  $ 232,678   $ 218,281   $ 499,771   $ 468,966
                       
                       
EBITDA(1)                      
                       
Television $ 48,519   $ 46,198   $ 106,102   $ 99,652
Radio   19,003     19,975     48,559     51,113
Out-of-Home   3,604     3,091     13,816     10,870
Corporate   (6,851)     (6,677)     (14,855)     (13,787)
                       
    64,275     62,587     153,622     147,848
Part II licence fees accrual reversal (2)   -     -     -     11,552
                       
  $ 64,275   $ 62,587   $ 153,622   $ 159,400

   
(1) See Appendix 1.
(2) See "Part II Licence Fees Accrual Reversal" section in the Management's Discussion and Analysis.



ASTRAL MEDIA INC.
Appendix 1
Supplementary Measures
for the periods ended February 28, 2011 and 2010
(unaudited)


In addition to disclosing earnings measures in accordance with Canadian generally accepted accounting principles ("GAAP"), this Press Release provides the following supplementary measures which are also factors used by management in monitoring and evaluating the performance of the Company and its business segments:

EBITDA (earnings before interest, taxes, depreciation and amortization) is provided to assist investors in determining the ability of the Company to generate cash flow from operating activities and to cover financial charges. EBITDA is also an indicator widely used for business valuation purposes. EBITDA margin is defined as the ratio obtained by dividing EBITDA by revenues.

The following table reconciles GAAP measures disclosed in the unaudited interim consolidated statements of earnings for the periods ended February 28, 2011 and 2010 to EBITDA:

    3 months     6 months
(in thousands of $)   2011   2010     2011   2010
                   
Earnings before income taxes   49,561   48,539     124,248   130,579
Depreciation and amortization   9,321   7,434     18,351   15,018
Interest expense, net   5,393   6,614     11,023   13,803
EBITDA   64,275   62,587     153,622   159,400
                   

Net earnings before future income tax recovery. This measure provides an indication of the Company's ability to generate earnings and cash flows from its ongoing operations, by excluding the non-cash future income tax recovery or expense resulting from income tax rate changes over which the Company has no control.

The following table reconciles GAAP measures disclosed in the unaudited interim consolidated statements of earnings for the periods ended February 28, 2011 and 2010 to net earnings before future income tax recovery:

    3 months     6 months
(in thousands of $)   2011   2010      2011   2010
                         
Net earnings   34,777   33,643     88,084   98,284
Future income tax recovery resulting from future income tax rate
changes
  -   -       -    (8,397)
Net earnings before future income tax recovery   34,777   33,643     88,084   89,887
                   

Net earnings, basic and diluted earnings per share before Part II licence fees accrual reversal and future income tax recovery. These measures provide an indication of the Company's ability to generate earnings from its ongoing operations, by excluding some regulatory items over which the Company has no control and the non-cash future income tax recovery or expense resulting from income tax rate changes.

The following tables reconcile GAAP measures disclosed in the unaudited interim consolidated statements of earnings for the periods ended February 28, 2011 and 2010 to net earnings, basic and diluted earnings per share before Part II licence fees accrual reversal and future income tax recovery:


           
              3 months       6 months
(in thousands of $)   2011   2010     2011    2010
                   
Net earnings   34,777   33,643     88,084    98,284
Part II licence fees accrual reversal, net of income taxes   -   -     -    (8,010)
Future income tax recovery resulting from income tax rate changes   -   -     -    (8,397)
Net earnings before Part II licence fees accrual reversal and future
income tax recovery
  34,777   33,643     88,084    81,877
 
    3 months       6 months
(in dollars)   2011   2010     2011    2010
                   
Basic earnings per share   0.61   0.60     1.55    1.74
Part II licence fees accrual reversal, net of income taxes   -   -     -    (0.14)
Future income tax recovery resulting from income tax rate changes   -   -     -    (0.15)
Basic earnings per share before Part II licence fees accrual reversal
and future income tax recovery 
  0.61   0.60     1.55    1.45
 
    3 months     6 months 
(in dollars)   2011    2010     2011    2010
                   
Diluted earnings per share   0.61   0.59     1.53    1.72
Part II licence fees accrual reversal, net of income taxes   -   -       -   (0.14)
Future income tax recovery resulting from income tax rate changes   -   -     -    (0.15)
Diluted earnings per share before Part II licence fees accrual reversal
and future income tax recovery
  0.61   0.59       1.53   1.43

Cash flow from operations is defined as cash flow from operating activities before the net change in non-cash operating items. This measure provides an indication of the Company's ability to generate cash flows without considering certain timing and other factors causing variations in non-cash operating items.

The following table reconciles GAAP measures disclosed in the unaudited interim consolidated statements of cash flows for the periods ended February 28, 2011 and 2010 to cash flow from operations:

                   
     3 months       6 months
(in thousands of $)   2011   2010     2011   2010
                         
Cash provided by operating activities   59,184   55,823     95,378   82,900
Net change in non-cash operating items   (10,301)   (9,493)     20,508   23,311
Cash flow from operations   48,883   46,330     115,886   106,211
                   

The above supplementary measures do not have a standardized meaning prescribed by GAAP and may not be comparable to similar measures presented by other companies.

 

 

 

SOURCE ASTRAL MEDIA INC.

For further information:

Media:  Hugues Mousseau
Manager, Corporate Communications
Astral Media Inc.
514-939-5000
Analysts :  Claude Gagnon
Senior Vice-President and
Chief Financial Officer
Astral Media Inc.
514-939-5000

 

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ASTRAL MEDIA INC.

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