Operating highlights:
- More than 100,000 XM-equipped GM Canada vehicles delivered
- The entire 2008 model year of Infiniti vehicles to have XM Satellite
Radio factory installed as standard equipment - a Canadian first
- Landmark partnership with Rogers Communications to provide XM
programming across the Rogers wireless, cable and Internet platforms
- Achieved 237,500 subscribers and aligned subscriber definitions more
closely with industry standards to include factory-activated vehicles
- Increased to 120 channels to provide more music and programming
choices than any other satellite radio provider in Canada
- Launching eight-year NHL exclusive partnership; more than 1,000 games
each season on XM beginning July 1 of this yearTORONTO, April 16 /CNW/ - Canadian Satellite Radio Holdings Inc. ("CSR")
(TSX:XSR), today reported its financial results for the second quarter ended
February 28, 2007 based on the achievement of 237,500 subscribers.
"We are pleased with our performance this quarter and are confirming our
position as Canada's premium digital audio entertainment and information
company," said John Bitove, Chairman and CEO of Canadian Satellite Radio
Holdings Inc.
"We will continue to build our subscriber base through innovative
partnerships such as our new agreement with Rogers Communications, which is
another landmark deal for XM Canada and another first for the industry," said
Bitove. "Through an aggressive team effort, we are on track to reach one
million subscribers by 2010."
Financial results
For the three-month period ended February 28, 2007, XM Canada reported
revenue of $4.9 million, an increase of 27 per cent over the previous quarter
and a 325 per cent increase over the second quarter of 2006. This increase in
revenue is due to an overall increase in subscriptions, activation fees, sale
of merchandise through our direct fulfillment channel, advertising revenue on
Canadian-produced channels and other revenue from partnership subscribers.
Adjusted operating loss(1) for the three-month period was $15.8 million,
an improvement of $1.6 million over the second quarter of 2006. Adjusted
operating loss is expected to improve as we continue to grow our subscriber
base and manage operating expenses.
For the second quarter, Average Revenue Per Unit (ARPU) was $10.90, a
decrease of $1.11 from the second quarter of 2006. We incurred Subscriber
Acquisition Costs (SAC) of $53 per gross addition, a decrease of $16 from our
second quarter of 2006. Cost Per Gross Addition (CPGA) was $207, an increase
of $13 over our second quarter of 2006.
ARPU and SAC decreased from the second quarter of 2006 due to our fiscal
2007 holiday promotion, which included service credits and hardware rebates
that have been amortized over the term of the subscriber payment plan and were
accounted for against revenue, as well as the introduction of multi-year plans
during the summer of 2006. SAC was improved by an increase in the subscriber
additions through our automotive partnerships. CPGA increased as a result of
our first full holiday season marketing campaign.
Operational expenses for the three-month period ended February 28, 2007
included general and administrative expenses of $4.1 million, marketing of
$9.3 million and cost of revenue of $7.3 million.New partnerships
- XM Canada and Rogers Communications formed a comprehensive partnership
that provides XM Canada programming across Rogers wireless, cable and
Internet platforms. Rogers customers can subscribe to XM Canada
programming regardless of whether they are using a wireless handset,
watching cable television or surfing the Internet.
- XM Canada began a new partnership with Avis Budget Group Inc. Across
Canada, pre-installed XM satellite radios are now available in full-
size rental vehicles manufactured by General Motors and other
automotive partners.
- Air Canada launched its new in-flight music channel service "XM
enRoute", powered exclusively by XM Canada. This is the only
partnership of its kind in Canada and allows XM Canada programming to
reach the more than 32 million passengers who fly with Air Canada each
year."XM Canada is expanding rapidly across a number of platforms and changing
the way that Canadians experience satellite radio," said Bitove. "We have the
best network and satellite coverage to provide outstanding programming to
subscribers right across the country."
Subscriber definition alignment
In an effort to align our definitions more closely with industry norms,
our subscriber numbers now include vehicles factory-activated with the XM
service whereby automakers have agreed to pay for a portion or all of the
trial period service. Based on the new definitions, the total count was
237,500 subscribers as of February 28, 2007 which is comprised of 219,300
paying subscribers and 18,200 OEM promotional subscribers.
Conference Call/Webcast
John I. Bitove, Chairman and Chief Executive Officer, Stephen Tapp,
President and Chief Operating Officer and Michael Washinushi, Chief Financial
Officer will discuss the second quarter results on Monday, April 16, 2007 at 2
p.m. (ET). To participate in the conference call, please dial 1-416-644-3415
(Toronto) or 1-800-733-7571 (Toll Free) to participate.
A live audio webcast (listen-only mode) of the conference call will be
available at
http://www.newswire.ca/en/webcast/viewEvent.cgi?eventID=1787940
and www.cdnsatrad.com. The slides to accompany the financial results are
found at www.cdnsatrad.com.
An archived recording of the conference will be available at
1-416-640-1917 (Toronto) or 1-877-289-8525 (Toll-free) (Passcode: 21225126
followed by the number sign) on April 16, 2007 after 4 p.m. EDT until April
30, 2007 at 11:59 p.m. EDT.
Forward-Looking Statements
Certain statements in this media release 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. Although CSR 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.
CSR's forward-looking statements are expressly qualified in their entirety by
this cautionary statement. CSR 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.
Additional information identifying risks and uncertainties is contained
in CSR's filings with the Canadian securities regulators, available at
www.sedar.com.
Related financial documents, including Interim Financial Statements and
Management Discussion and Analysis, have been filed with SEDAR for posting to
www.sedar.com. Copies of Canadian Satellite Radio Holdings Inc. financial
documents are also available upon request through the www.cdnsatrad.com
website and from the contact listed on this media release.
About Canadian Satellite Radio Holdings Inc.
Canadian Satellite Radio Holdings Inc. (TSX: XSR) operates as XM
Canada(TM) through its subsidiary, Canadian Satellite Radio Inc. XM is
Canada's premium digital audio entertainment and information company with the
best satellite coverage in the country and offering a unique lineup of premier
Canadian and international content.
XM Canada offers listeners the most channels of unique and exclusive
programming including the most NHL(TM) games, PGA TOUR(TM) and Major League
Baseball(TM) coverage, the deepest play list, and news, talk, sports,
entertainment and children's programming. After this season, XM will become
the exclusive provider of NHL games on satellite radio. Acura, Buick,
Cadillac, Chevrolet, General Motors, GMC, Harley Davidson, Honda, Hummer,
Hyundai, Infiniti, Lexus, Nissan, Pontiac, Toyota, Saab, Saturn, Suzuki and
Subaru will offer XM radios in more than 115 different models of vehicles for
model year 2007.
XM has an exclusive Canadian license from U.S.-based XM Satellite Radio
Inc. (NASDAQ: XMSR), the leading satellite radio provider in the U.S. with
more than 7.6 million subscribers. XM is offered on TELUS Mobile Radio(TM) and
on Rogers Communications wireless, cable and Internet platforms. XM Canada is
the exclusive music channel provider on Air Canada's flights and pre-installed
radios are available in select Avis Budget Group rental vehicles. A live
stream of selected XM Canada channels is available via a three-day
complimentary trial of XM Radio Online at http://listen.xmradio.ca. To
subscribe to XM Canada online or for more information about XM Canada's
programming lineup and radio choice, visit www.xmradio.ca.
To find out more about Canadian Satellite Radio Inc. (TSX: XSR), visit
our website at www.cdnsatrad.com.----------------------
(1) Adjusted operating loss defined in Consolidated Statement of
Operations and Deficit.
Canadian Satellite Radio Holdings Inc
Interim Consolidated Balance Sheet (Unaudited)
February 28, August 31,
2007 2006
$ $
Assets
Current assets
Cash 18,428,307 45,188,214
Short term investment (note 2) 5,850,000 -
Accounts receivable 3,999,334 2,125,367
Inventory 222,326 600,124
Prepaid expenses and other assets 6,078,249 6,882,247
Restricted investments (note 3) 14,447,914 13,663,023
-------------------------------
49,026,130 68,458,975
Restricted investments (note 3) 13,803,574 19,370,939
Deferred financing costs (note 3) 4,801,280 5,146,280
Property and equipment 22,266,216 23,221,760
Contract rights, distribution rights
and computer software 229,958,530 239,648,067
-------------------------------
Total assets 319,855,730 355,846,021
-------------------------------
-------------------------------
Liabilities and Shareholders'
Equity (Deficiency)
Current liabilities
Accounts payable and accrued liabilities 13,921,658 13,516,770
Deferred revenue 7,248,077 2,969,366
-------------------------------
21,169,735 16,486,136
Long-term debt (note 3) 117,000,000 110,660,000
Deferred revenue 2,858,847 1,032,289
Long-term obligations 352,960 310,405
-------------------------------
Total liabilities 141,381,542 128,488,830
-------------------------------
Shareholders' Equity (Deficiency)
Share capital (note 4) 312,785,862 312,595,362
Contributed surplus 28,256,451 26,344,137
Deficit (162,568,125) (111,582,308)
-------------------------------
Total shareholders' equity (deficiency) 178,474,188 227,357,191
-------------------------------
Total liabilities and shareholders'
equity (deficiency) 319,855,730 355,846,021
-------------------------------
-------------------------------
Canadian Satellite Radio Holdings Inc.
Interim Consolidated Statement of Operations and Deficit (Unaudited)
Three months ended Six months ended
February 28, February 28,
2007 2006 2007 2006
$ $ $ $
Revenue 4,861,572 1,144,931 8,700,254 1,190,941
Operating expenses
Cost of revenue 7,323,338 5,190,056 12,920,004 8,319,699
Indirect costs - - - 827,125
General and
administrative 4,124,858 4,012,465 8,939,310 9,600,470
Stock-based
compensation
(note 4) 842,105 22,244,546 1,687,541 22,244,546
Marketing 9,260,430 9,385,347 15,526,672 14,015,595
Amortization of
intangible assets
and property and
equipment 5,602,545 4,712,630 11,204,531 5,191,310
------------------------------------------------------
27,153,276 45,545,044 50,278,058 60,198,745
------------------------------------------------------
Loss before the
undernoted (22,291,704) (44,400,113) (41,577,804) (59,007,804)
Interest revenue 771,782 445,337 1,501,381 445,337
Interest expenses 4,081,607 656,926 7,821,868 656,926
Foreign exchange
loss(gain) 1,462,332 (650,389) 3,087,526 (651,229)
------------------------------------------------------
Net loss for the
period (27,063,861) (43,961,313) (50,985,817) (58,568,164)
Deficit -
Beginning of
period (135,504,264) (23,485,581) (111,582,308) (8,878,730)
------------------------------------------------------
Deficit - End
of period (162,568,125) (67,446,894) (162,568,125) (67,446,894)
------------------------------------------------------
------------------------------------------------------
Basic and fully
diluted loss per
common share (0.57) (1.05) (1.07) (2.81)
------------------------------------------------------
------------------------------------------------------
Canadian Satellite Radio Holdings Inc.
Reconciliation of Loss before the undernoted to Adjusted Operating Loss
3 Months Ended 3 Months Ended
Feb. 28, 2007 Feb. 28, 2006
Loss before the undernoted as reported (22,291,704) (44,400,113)
Add back non-Adjusted Operating Loss
items included in Operating loss
Amortization 5,602,545 4,712,630
Stock-Based Compensation 842,105 22,244,546
Costs paid by parent company 50,601 0
Adjusted Operating Loss (15,796,453) (17,442,937)Adjusted Operating Loss
-----------------------
Adjusted Operating Loss is defined as Loss before the undernoted
excluding amortization, stock-based compensation to employees, directors,
officers and service providers, and non-cash costs paid by parent company. We
believe that Adjusted Operating Loss, as opposed to Operating loss or Net
loss, provides a better measure of our core business operating results and
improves comparability. This non-GAAP measure should be used in addition to,
but not as a substitute for, the analysis provided in statement of operations.
We believe Adjusted Operating Loss is a useful measure of our operating
performance and is a significant basis used by our management to measure the
operating performance of our business. While amortization and stock-based
compensation are considered operating costs under generally accepted
accounting principles, these expenses primarily represent non-cash current
period allocation of costs associated with long-lived assets acquired or
constructed in prior periods and non-cash employee and service provider
compensation. Costs paid by parent company are non-cash costs related to the
licence application process and are not related to ongoing operations of the
business. Adjusted Operating Loss is a calculation used as a basis for
investors and analysts to evaluate and compare the periodic and future
operating performances and value of similar companies in our industry,
although our measure of Adjusted Operating Loss may not be comparable to
similarly titled measures of other companies. Adjusted Operating Loss does not
purport to represent operating loss or cash flow from operating activities, as
those terms are defined under generally accepted accounting principles, and
should not be considered as an alternative to those measurements as an
indicator of our performance.Canadian Satellite Radio Holdings Inc.
Interim Consolidated Statement of Cash Flows (Unaudited)
Three months ended Six months ended
February 28, February 28,
2007 2006 2007 2006
$ $ $ $
Cash provided by (used in)
Operating activities
Net loss for
the period (27,063,861) (43,961,313) (50,985,817) (58,568,164)
Add (deduct):
Non-cash items
Costs paid by
parent company 50,601 - 100,011 2,862,764
Stock-based
compensation
expense 842,105 22,244,546 1,687,541 22,244,546
Amortization of
intangible
assets 4,820,554 4,245,099 9,644,053 4,687,474
Amortization of
property and
equipment 781,991 467,531 1,560,478 503,836
Accrued interest
- debt 531,308 - 12,147 -
Accrued interest
receivable (332,168) - (725,592) -
Amortization of
deferred financing
costs 186,270 - 345,000 -
Interest accretion
expense 8,694 15,857 17,328 16,409
Unrealized foreign
exchange
losses(gains) 1,471,573 (650,389) 3,360,112 (651,229)
Net change in
non-cash working
capital related to
operations
(note 7) 2,721,734 (15,656,528) 7,006,605 (4,374,406)
-----------------------------------------------------
Net cash used in
operating
activities (15,981,199) (33,295,197) (27,978,134) (33,278,770)
-----------------------------------------------------
Investing activities
Restricted
investments - (41,015,595) - (41,015,595)
Payment of interest
from restricted
investments 7,458,750 - 7,458,750 -
Purchase of short
term investments (5,850,000) - (5,850,000) -
Purchase of
property and
equipment (225,539) (17,073,694) (1,341,712) (17,073,694)
Purchase of
computer software (54,001) (4,781,761) (78,015) (4,781,761)
-----------------------------------------------------
Net cash used
in(provided by)
investing
activities 1,329,210 (62,871,050) 189,023 (62,871,050)
-----------------------------------------------------
Financing activities
Initial public
offering - net of
issuance costs - 50,042,354 - 50,042,354
Shares issued to
CSR Investments - 15,000,000 - 15,000,000
Deferred financing
costs - (4,641,862) - (4,641,862)
Proceeds from
long-term debt - 115,420,000 - 115,420,000
-----------------------------------------------------
Net cash provided
by financing
activities - 175,820,492 - 175,820,492
-----------------------------------------------------
Foreign exchange
gains(losses)
on cash held in
foreign currency 461,032 (674,082) 1,029,204 (673,242)
-----------------------------------------------------
Change in cash
during the
period (14,190,957) 78,980,163 (26,759,907) 78,997,430
Cash - Beginning
of period 32,619,264 17,287 45,188,214 20
-----------------------------------------------------
Cash - End
of period 18,428,307 78,997,450 18,428,307 78,997,450
-----------------------------------------------------
-----------------------------------------------------
Supplemental cash
flow disclosures
Rights acquired
through issuance
of shares - - - 230,412,000
Property and
equipment
purchases in
accounts payable - 2,672,888 - 2,672,888
Computer software
purchases in
accounts payable - 632,514 - 632,514
Prepaid advertising
purchased through
issuance of equity - 2,000,000 - 2,000,000
Additions to
property and
equipment and
long-term
obligations for
asset retirement
obligations - 89,579 - 512,873%SEDAR: 00022901E
For further information: for investor information, please contact: (416)
408-6899, investor.relations@xmradio.ca; for media information, please
contact: Wilcox Group, (416) 203-6666, XMradio@wilcoxgroup.com
