Astral shows continued growth in the third quarter of Fiscal 2012

  • 7% increase in net earnings1
  • 9% increase in diluted EPS1

MONTREAL, July 12, 2012 /CNW Telbec/ - Astral Media Inc. (TSX: ACM.A ACM.B) today reported its financial results for the third quarter ended May 31, 2012, which saw continued growth in net earnings, EPS, EBITDA2 and cash flow from operations2.

For the third quarter, consolidated net earnings1 grew by 7% to $56.2 million from $52.6 million for the same period last year, while diluted earnings per share grew 9% to $1.00 from $0.92 per share last year. Consolidated revenues for the third quarter totalled $265.5 million, a 1% decrease over the $268.0 million recorded last year for the same period. EBITDA2 rose by 2% to $89.2 million from $87.8 million for the same period last year. Cash flow from operations2 rose by 2% to $68.7 million for the third quarter compared to $67.3 million for the corresponding period last year.

For the first nine months of the year, consolidated net earnings1 grew by 7% over last year to $150.1 million from $140.4 million, while diluted earnings per share1 grew 9% to $2.67 from $2.45 last year. Consolidated revenues for the first nine months of Fiscal 2012 totalled $770.1 million, a slight increase over the $767.8 million recorded last year for the same period. EBITDA2 rose by 2% to $245.6 million from $241.2 million for the same period last year. Cash flow from operations2 rose by 3% to $187.9 million for the first nine months of the year compared to $182.7 million for the corresponding period last year.

"I am pleased by the third quarter results announced today and by Astral's ability to continue to achieve a strong performance in spite of the challenging advertising market in which we operate," said Ian Greenberg, President and Chief Executive Officer. "Our relentless focus on maintaining our operational margins, commitment towards new product development and innovation, and optimal treasury management practices, enabled us to deliver another strong quarter of earnings growth."

FINANCIAL AND OPERATIONAL HIGHLIGHTS

Television

  • Revenue decline of 2% for the quarter (1% growth for the nine-month period);
  • EBITDA2 growth of 2% for the quarter (2% growth for the nine-month period2);
  • Launch, on July 4, of the new Cartoon Network service, available to over one million subscribers on Cogeco, Eastlink and Telus.

Radio

  • Revenue decline of 1% for the quarter (2% decline for the nine-month period);
  • EBITDA2 growth of 1% for the quarter (3% decline for the nine-month period).

Out-of-Home

  • Revenue growth of 3% for the quarter (8% growth for the nine-month period);
  • EBITDA2 growth of 2% for the quarter (11% growth for the nine-month period);
  • Announcement, on June 12, of the addition of two new Digital Network faces in the Greater Montréal region, bringing Astral's popular national Digital Network to 41 faces;
  • Announcement, on June 19, of the launch of a new innovative urban Digital Columns network of 30 faces in the heart of downtown Montréal.

Corporate

  • Following the announcement of the Bell-Astral Transaction3, the Company's dividend payment scheduled for August 2012 and activity under the Normal Course Issuer Bid have been suspended;
  • During the third quarter, the Company repaid $70.0 million of its long-term debt for a total of $100.0 million after nine months;
  • On May 24, Astral shareholders approved the acquisition of all of the Company's issued and outstanding shares by BCE Inc. (the "Bell-Astral Transaction");
  • On May 25, the Québec Superior Court approved the plan of arrangement under section 192 of the Canada Business Corporations Act relative to the Bell-Astral Transaction3 and declared that the plan of arrangement is fair to shareholders of Astral.

The unaudited interim condensed 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 at 10:30 a.m. on Thursday, July 12, 2012. 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.

Founded in 1961, 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.   Excluding acquisition and other costs, as well as Bell-Astral transaction costs. See details in the "Additional IFRS and Non-IFRS Measures" in Appendix 1.
2.   See "Additional IFRS and Non-IFRS Measures" in Appendix 1.
3.   See the "Acquisition of Astral" section in the Management's Discussion and Analysis.


ASTRAL MEDIA INC.
Interim Consolidated Statements of Earnings
for the periods ended May 31, 2012 and 2011
(in thousands of Canadian dollars except for per-share data)
(unaudited)
 
                 
    3 months 9 months
    2012   2011   2012   2011
                 
Revenues $ 265,522 $ 268,040 $ 770,125 $ 767,811
                 
Operating expenses   176,365   180,172   524,523   526,562
Bell-Astral Transaction costs   6,232   -   6,232   -
Acquisition and other costs   554   4,407   4,865   4,407
Depreciation of property, plant and equipment   7,203   7,150   22,069   21,031
Amortization of other intangible and non-current assets   1,985   1,516   5,923   6,030
Financial expense, net   3,387   4,980   11,313   16,150
                 
Earnings before income taxes   69,796   69,815   195,200   193,631
                 
Income tax provision   18,608   20,275   53,251   56,346
                 
Net earnings $ 51,188 $ 49,540 $ 141,949 $ 137,285
                 
Earnings per share                

- Basic $ 0.92 $ 0.88 $ 2.55 $ 2.43

- Diluted $ 0.91 $ 0.87 $ 2.53 $ 2.40


ASTRAL MEDIA INC. 
Interim Consolidated Statements of Comprehensive Income
for the periods ended May 31, 2012 and 2011
(in thousands of Canadian dollars)
(unaudited)
                 
                 
  3 months   9 months
    2012   2011   2012   2011
                 
Net earnings $ 51,188 $ 49,540 $ 141,949 $ 137,285
Other comprehensive income                
Actuarial gain (loss) on employee future benefit plans, net of income tax expense (recovery) of ($1.9 million)
and ($1.4 million) respectively for the three months, and ($5.6 million) and $0.1 million respectively for
the nine months
  (5,271)   (3,942)   (15,634)   289
Change in fair value of derivatives designated as cash flow hedges, net of income tax expense (recovery) of
($0.3 million) and $0.4 million respectively for the three months, and $0.3 million and $1.8 million
respectively for the nine months
  (780)   1,030   853   4,734
                 
Comprehensive income $ 45,137 $ 46,628 $ 127,168 $ 142,308


ASTRAL MEDIA INC. 
Interim Consolidated Statements of Cash Flows
for the periods ended May 31, 2012 and 2011
(in thousands of Canadian dollars)
(unaudited)
                     
                     
  3 months   9 months
    2012   2011   2012   2011
                 
OPERATING ACTIVITIES                
  Net earnings $ 51,188 $ 49,540 $ 141,949 $ 137,285
                 
  Non-cash items:                
    Stock-based compensation costs   5,681   1,759   9,705   5,975
    Depreciation and amortization   9,188   8,666   27,992   27,061
    Imputed interest, net   407   452   1,092   1,210
    Amortization of deferred financing costs   272   172   749   515
    Deferred tax expense   2,013   6,679   6,423   10,656
                 
  Cash flows from operations   68,749   67,268   187,910   182,702
  Net change in non-cash operating items   8,666   14,294   (30,181)   (5,762)
                 
Cash provided by operating activities   77,415   81,562   157,729   176,940
                 
INVESTING ACTIVITIES                
  Additions to property, plant and equipment   (9,271)   (11,959)   (21,653)   (29,646)
  Additions to other intangible and non-current assets   (899)   (2,434)   (3,195)   (10,283)
  Business acquisition, net of cash acquired   (301)   -   (11,821)   -
Cash used for investing activities   (10,471)   (14,393)   (36,669)   (39,929)
                 
FINANCING ACTIVITIES                
  Repayment of long-term debt   (70,000)   (55,000)   (100,000)   (65,000)
  Deferred financing costs   -   -   (2,017)   -
  Stock options exercised   1,936   260   19,212   12,863
  Shares repurchased   -   (20,485)   (14,126)   (51,925)
  Dividends   -   (4)   (27,923)   (21,379)
Cash used for financing activities   (68,064)   (75,229)   (124,854)   (125,441)
                 
Net change in cash   (1,120)   (8,060)   (3,794)   11,570
Cash - beginning of period   19,979   31,175   22,653   11,545
Cash - end of period $ 18,859 $ 23,115 $ 18,859 $ 23,115


ASTRAL MEDIA INC.  
Interim Consolidated Balance Sheets as at
(in thousands of Canadian dollars)
(unaudited)
             
             
    May 31,   August 31,   September 1,
    2012   2011   2010
ASSETS            
             
Current            
  Cash $ 18,859 $ 22,653 $ 11,545
  Accounts receivable   181,273   170,063   169,240
  Program and film rights   105,564   105,385   106,723
  Prepaid expenses and other current assets   29,239   29,096   29,451
    334,935   327,197   316,959
             
Program and film rights   57,338   51,058   41,640
Property, plant and equipment   195,004   195,508   180,616
Broadcast licences   1,652,392   1,639,785   1,661,949
Goodwill   118,489   116,016   116,016
Other intangible and non-current assets   65,193   70,543   64,162
Non-current financial assets   16,227   19,852   22,848
Deferred tax assets   68,602   60,747   64,683
             
  $ 2,508,180 $ 2,480,706 $ 2,468,873
             
LIABILITIES            
             
Current            
  Accounts payable and accrued liabilities $ 130,837 $ 142,627 $ 143,780
  Provisions   3,073   4,621   3,380
  Income taxes payable   22,736   13,560   16,654
  Program and film rights payable   74,791   77,033   64,908
  Other current financial liabilities   -   1,945   -
    231,437   239,786   228,722
             
Long-term debt   422,865   524,133   588,447
Deferred tax liabilities   159,578   152,455   144,424
Program and film rights payable   10,447   8,839   12,668
Provisions   5,740   5,453   5,244
Other non-current liabilities   76,152   57,124   63,820
Other non-current financial liabilities   9,791   10,116   20,311
    916,010   997,906   1,063,636
             
SHAREHOLDERS' EQUITY            
             
Capital stock   779,386   762,572   768,762
Contributed surplus   18,588   17,278   18,903
Retained earnings   794,753   704,360   624,609
Accumulated other comprehensive loss   (557)   (1,410)   (7,037)
    794,196   702,950   617,572
    1,592,170   1,482,800   1,405,237
             
  $ 2,508,180 $ 2,480,706 $ 2,468,873

 


ASTRAL MEDIA INC.
Business Segments
for the periods ended May 31, 2012 and 2011
(in thousands of Canadian dollars) (unaudited)
                 
                 
  3 months   9 months
    2012   2011   2012   2011
                     
REVENUES                
                 
Television $ 151,488 $ 153,987 $ 445,601 $ 442,550
Radio   89,376   90,096   251,864   258,123
Out-of-Home   24,658   23,957   72,660   67,138
                 
  $ 265,522 $ 268,040 $ 770,125 $ 767,811
                 
                 
EBITDA(1)                
                 
Television $ 59,117 $ 58,207 $ 167,390 $ 164,104
Radio   29,456   29,227   75,443   77,710
Out-of-Home   8,199   8,072   24,344   21,938
Corporate   (7,615)   (7,638)   (21,575)   (22,503)
                 
  $ 89,157 $ 87,868 $ 245,602 $ 241,249

 
(1)      See Appendix 1.

ASTRAL MEDIA INC.
Appendix 1
Additional IFRS and Non-IFRS Measures
for the periods ended May 31, 2012 and 2011
(unaudited)


In addition to discussing earnings measures in accordance with International Financial Reporting Standards ("IFRS"), this Press Release provides the following additional IFRS and non-IFRS measures which are also factors used by the Company's management and Board of Directors in monitoring and evaluating the performance of the Company and its business segments:

Additional IFRS Measure

Cash flow from operations is defined as cash provided by 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.

Non-IFRS Measures

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. Other items such as acquisition and other costs and Bell-Astral Transaction costs are also excluded from earnings in the determination of EBITDA as they are not considered to be in the ordinary course of business. 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 IFRS measures disclosed in the unaudited interim consolidated statements of earnings for the periods ended May 31, 2012 and 2011 to EBITDA:

  3 months   9 months
(in thousands of $) 2012 2011   2012         2011
         
Earnings before income taxes          69,796 69,815      195,200 193,631
Depreciation and amortization   9,188         8,666        27,992      27,061
Financial expense, net   3,387 4,980        11,313      16,150
Acquisition and other costs    554 4,407          4,865        4,407
Bell-Astral Transaction costs 6,232 -          6,232 -
EBITDA          89,157       87,868      245,602    241,249

Net earnings and diluted earnings per share before acquisition and other costs and Bell-Astral Transaction costs. These measures provide an indication of the Company's ability to generate earnings from its ongoing operations, by excluding some items such as acquisition and other costs and Bell-Astral Transaction costs as they are not considered to be in the ordinary course of business.

The following tables reconcile IFRS measures disclosed in the unaudited interim consolidated statements of earnings for the periods ended May 31 2012 and 2011 to net earnings and diluted earnings per share before acquisition and other costs and Bell-Astral Transaction costs:

  3 months   9 months
(in thousands of $) 2012     2012 2011
           
Net earnings 51,188 49,540   141,949 137,285
Acquisition and other costs, net of income taxes 406 3,091   3,604 3,091
Bell-Astral Transaction costs, net of income taxes 4,570 -   4,570 -
Net earnings before acquisition and other costs and Bell-Astral Transaction costs 56,164 52,631   150,123 140,376
           
           
  3 months   9 months
(in dollars) 2012 2011   2012 2011
           
Diluted earnings per share 0.91 0.87   2.53 2.40
Acquisition and other costs, net of income taxes 0.01 0.05   0.06 0.05
Bell-Astral Transaction costs, net of income taxes 0.08 -   0.08 -
Diluted earnings per share before acquisition and other costs and Bell-Astral Transaction costs 1.00 0.92   2.67 2.45

The above additional IFRS and non-IFRS measures do not have a standardized meaning prescribed by IFRS and may not be comparable to similar measures presented by other companies.

 

 

 

 

 

SOURCE ASTRAL

For further information:

Media:

Hugues Mousseau
Director, Corporate Communications
and Synergies
Astral Media Inc.
514-939-5000
hmousseau@astral.com

Analysts :

Robert Fortier
Vice-President, Finance and
Chief Financial Officer
Astral Media Inc.
514-939-5000
rfortier@astral.com

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ASTRAL

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