Astral delivers solid third quarter results


    
    - 9% increase in revenues and 4% increase in EBITDA(1)
    - 9% increase in net earnings and 9% increase in basic EPS
    
</pre>
<p/>
<p><span class="xn-location">MONTREAL</span>, <span class="xn-chron">July 15</span> /CNW Telbec/ - Astral Media Inc. (TSX: ACM.A/ACM.B) today reported solid financial results for the third quarter ended <span class="xn-chron">May 31, 2010</span>, which saw continued growth in revenues, EBITDA(1), net earnings, EPS, and cash flow from operations(5).</p>
<p>"I am delighted with Astral's performance in the third quarter and by the strong growth displayed by each of our business units. I am particularly pleased that our advertising revenues increased 11% and that our subscription revenues grew a strong 7%, contributing to Astral's 55th consecutive quarter of profitable growth," said <span class="xn-person">Ian Greenberg</span>, President and Chief Executive Officer. "While we still operate in a slowly recovering economic and advertising market environment, we continue to reinforce our relationship with key partners such as Disney, HBO, NRJ and Virgin and sustain our strategic investments to further strengthen our offering to consumers and advertisers."</p>
<p>In the third quarter, consolidated revenues reached <span class="xn-money">$253.6 million</span>, a 9% increase from the <span class="xn-money">$232.5 million</span> reported last year for the same period. EBITDA(1) grew 4% in the third quarter to <span class="xn-money">$84.9 million</span> from <span class="xn-money">$81.8 million</span> for the same period last year. Consolidated net earnings for the third quarter increased 9% over the same quarter last year, rising to <span class="xn-money">$48.5 million</span> (<span class="xn-money">$0.86</span> per share) from <span class="xn-money">$44.3 million</span> (<span class="xn-money">$0.79</span> per share). Cash flow from operations(5) for the third quarter increased 10% to <span class="xn-money">$64.6 million</span> from <span class="xn-money">$58.6 million</span> for the same period last year.</p>
<p>In the first nine months of Fiscal 2010, consolidated revenues totalled <span class="xn-money">$722.6 million</span>, an increase of 5% over the <span class="xn-money">$686.3 million</span> recorded last year for the same period. EBITDA(1) for the first nine months increased 13% to <span class="xn-money">$244.3 million</span>(4) from <span class="xn-money">$216.5 million</span>(2) for the same period last year. Consolidated net earnings for the first nine months increased by 25% over last year, to <span class="xn-money">$138.3 million</span>(3, 4) (<span class="xn-money">$2.45</span> per share(3, 4)) from <span class="xn-money">$111.0 million</span>(2) (<span class="xn-money">$1.98</span> per share(2)). Cash flow from operations(5) rose 15% to <span class="xn-money">$169.9 million</span>(3, 4) for the first nine months of the year compared to <span class="xn-money">$147.4 million</span>(2) for the same period last year.</p>
<p/>
<p>FINANCIAL AND OPERATIONAL HIGHLIGHTS</p>
<p/>
<p>Television</p>
<p/>
<pre>
    
    - Revenue growth of 9% for the third quarter (7% growth for the nine-
      month period);
    - EBITDA(1) growth of 2% for the third quarter (14% growth for the nine-
      month period(2, 4);
    - Number of pay-TV subscribers (The Movie Network and Super Écran) grew
      4% over the same period last year to over 1.8 million;
    - On May 31, 2010, announcement of the launch of the new Playhouse Disney
      télé service in French, available since July 5 on Bell TV.
    
</pre>
<p/>
<p>Radio</p>
<p/>
<pre>
    
    - Revenue growth of 9% for the third quarter (2% growth for the nine-
      month period);
    - EBITDA(1) growth of 6% for the third quarter (9% growth for the nine-
      month period(2, 4).
    - On May 27, launch of 97.7 EZ Rock, a new station broadcasting in the
      Ottawa-Gatineau market.
    
</pre>
<p/>
<p>Out-of-Home</p>
<p/>
<pre>
    
    - Revenue growth of 10% for the third quarter (7% growth for the nine-
      month period);
    - EBITDA(1) growth of 11% for the third quarter (15% growth for the nine-
      month period);
    - Expansion of Canada's first national Digital outdoor advertising
      network with the addition of two new digital advertising faces in the
      Toronto market during the third quarter.
    
</pre>
<p/>
<p>Corporate</p>
<p/>
<pre>
    
    - On May 27, the Company launched its new corporate brand identity;
    - On June 28, the Company moved its executive offices and certain
      divisional offices to the new Maison Astral building located at
      1800 avenue McGill College in the heart of downtown Montréal.
    
</pre>
<p/>
<p>The unaudited interim consolidated financial statements with related notes and Management's Discussion and Analysis are available on the Company's website: <a href="http://www.astral.com">www.astral.com</a>.</p>
<p/>
<p>There will be a conference call with analysts and media at <span class="xn-chron">10:30 a.m.</span> on <span class="xn-chron">Thursday, July 15, 2010</span>. To access the conference call dial 1-877-974-0445. The conference call will also be broadcast live and archived for a three-month period on the Astral website at <a href="http://www.astral.com">www.astral.com</a>.</p>
<p/>
<p>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 <a href="http://www.astral.com">www.astral.com</a>.</p>
<p/>
<p>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. We disclaim any intention or obligation to update or revise any forward-looking statements.</p>
<p/>
<pre>
    
    1. EBITDA is defined as earnings before interest, taxes, depreciation and
       amortization. See Appendix 1.
    2. After the restatement of Fiscal 2009 figures following the adoption of
       Section 3064 of the CICA Handbook. See details in the Management's
       Discussion and Analysis.
    3. Excluding the impact of an $8.4 million ($0.15 per share) non-cash
       future income tax recovery resulting from future income tax rate
       changes enacted by the Ontario Government. See Appendix 1.
    4. Including the $11.6 million in Part II licence fees accrual reversal
       ($8.0 million net of income taxes or $0.14 per share) in the first
       quarter of Fiscal 2010 ($3.2 million in Television and $8.4 million in
       Radio). See details in the Management's Discussion and Analysis.
    5. See Appendix 1.


    ASTRAL MEDIA INC.
    Interim Consolidated Statements of Earnings
    for the periods ended May 31, 2010 and 2009
    (in thousands of Canadian dollars except for per-share data)
    (unaudited)

    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

                                   3 months                    9 months
                       --------------------------  --------------------------
                              2010          2009          2010          2009
                       ------------------------------------------------------
                                    (Restated)(1)               (Restated)(1)

    Revenues           $   253,597   $   232,537   $   722,563   $   686,298

    Operating expenses     168,663       150,703       478,229       469,823
                       ------------------------------------------------------

    EBITDA(2)               84,934        81,834       244,334       216,475

      Depreciation           6,459         5,627        18,886        16,245
      Amortization
       of intangible
       assets                1,562         1,206         4,153         3,510
      Interest
       expense, net          6,509         8,926        20,312        28,990
      Restructuring
       charges                   -           616             -         3,307
                       ------------------------------------------------------

    Earnings before
     income taxes           70,404        65,459       200,983       164,423
                       ------------------------------------------------------

    Income tax
     provision before
     undernoted             21,947        21,190        62,639        53,446
    Future income
     tax recovery
     resulting from
     income tax rate
     changes                     -             -        (8,397)            -
                       ------------------------------------------------------
                            21,947        21,190        54,242        53,446
                       ------------------------------------------------------

    Net earnings       $    48,457   $    44,269   $   146,741   $   110,977
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Earnings per share
      - Basic          $      0.86   $      0.79   $      2.60   $      1.98
                       ------------------------------------------------------
      - Diluted        $      0.85   $      0.78   $      2.57   $      1.96
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    ----------------
    (1) Following the adoption of Canadian Institute of Chartered
        Accountants' ("CICA") Handbook Section 3064, the Company has restated
        results of operations for the three- and nine-month periods ended
        May 31, 2009 (see Note 1.b) of the unaudited interim consolidated
        financial statements).
    (2) See Appendix 1.


    ASTRAL MEDIA INC.
    Interim Consolidated Statements of Cash Flows
    for the periods ended May 31, 2010 and 2009
    (in thousands of Canadian dollars)
    (unaudited)

    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

                                   3 months                    9 months
                       --------------------------  --------------------------
                              2010          2009          2010          2009
                       ------------------------------------------------------
    Cash and cash                   (Restated)(1)               (Restated)(1)
     equivalents
     provided by
     (used for):

    OPERATING
     ACTIVITIES
      Net earnings     $    48,457   $    44,269   $   146,741   $   110,977

      Non-cash charges
       (credits):
        Part II licence
       fees accrual
       reversal                  -             -       (11,552)            -
        Stock-based
         compensation
         costs               1,334         1,505         4,805         4,771
        Depreciation
         and
         amortization        8,021         6,833        23,039        19,755
        Imputed
         interest
         on other
         non-current
         liabilities           558           584         1,641         1,903
        Amortization
         of deferred
         financing
         costs                 173           172           515           515
        Future income
         tax expense
         before
         undernoted          6,028         5,230        13,076         9,468
        Future income
         tax recovery
         resulting
         from income
         tax rate
         changes                 -             -        (8,397)            -
                       ------------------------------------------------------
      Cash flow from
       operations(2)        64,571        58,593       169,868       147,389

      Net change in
       non-cash
       operating items     (13,303)        7,275       (33,582)       11,805
                       ------------------------------------------------------
    Cash provided
     by operating
     activities             51,268        65,868       136,286       159,194
                       ------------------------------------------------------

    INVESTING
     ACTIVITIES
      Short-term
       investments
       - cashed                  -             -             -         9,962
      Additions to
       property, plant
       and equipment       (11,388)      (11,324)      (31,471)      (31,351)
      Additions to
       other
       intangible and
       non-current
       assets               (1,163)       (4,081)       (8,854)       (5,376)
      Business
       acquisition,
       net of cash
       acquired                  -             -             -        (2,787)
                       ------------------------------------------------------
    Cash used for
     investing
     activities            (12,551)      (15,405)      (40,325)      (29,552)
                       ------------------------------------------------------

    FINANCING
     ACTIVITIES
      Repayment of
       long-term debt      (55,000)      (55,000)      (95,000)      (75,000)
      Stock options
       exercised               954         1,338         9,068         1,503
      Shares
       repurchased            (665)            -        (1,523)            -
      Dividends                 (4)           (4)      (14,149)      (14,038)
                       ------------------------------------------------------
    Cash used for
     financing
     activities            (54,715)      (53,666)     (101,604)      (87,535)
                       ------------------------------------------------------

    Net change in
     cash and cash
     equivalents           (15,998)       (3,203)       (5,643)       42,107
    Cash and cash
     equivalents
     (bank overdraft)
     - beginning of
     period                 33,455        41,666        23,100       (3,644)
                       ------------------------------------------------------
    Cash and cash
     equivalents -
     end of period     $    17,457   $    38,463   $    17,457   $    38,463
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) Following the adoption of CICA Handbook Section 3064, the Company has
        restated results of operations for the three- and nine-month periods
        ended May 31, 2009 (see Note 1.b) of the unaudited interim
        consolidated financial statements).
    (2) See Appendix 1.


    ASTRAL MEDIA INC.
    Interim Consolidated Balance Sheets as at
    (in thousands of Canadian dollars)
    (unaudited)

    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

                                                        May 31,    August 31,
                                                          2010          2009
                                                   --------------------------
                                                                (Restated)(1)

    ASSETS

    Current
      Cash and cash equivalents                    $    17,457   $    23,100
      Accounts receivable                              175,086       143,803
      Program and film rights                          108,410        92,545
      Prepaid expenses and other current assets         26,763        27,904
                                                   --------------------------
                                                       327,716       287,352

    Program and film rights                             52,809        61,219
    Property, plant and equipment                      162,177       151,637
    Broadcast licences                               1,413,059     1,408,037
    Goodwill                                           356,945       356,945
    Other intangible and non-current assets             59,865        50,894
    Future income tax assets                            61,097        79,522
                                                   --------------------------
                                                   $ 2,433,668   $ 2,395,606
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    LIABILITIES

    Current
      Accounts payable and accrued liabilities     $   115,645   $   138,771
      Income taxes payable                              20,511        12,191
      Program and film rights payable                   63,668        58,220
      Future income tax liabilities                      4,993         4,481
                                                   --------------------------
                                                       204,817       213,663

    Long-term debt                                     598,276       692,761
    Future income tax liabilities                      232,355       243,353
    Other non-current liabilities                       75,976        65,267
    Derivative financial instruments                    10,953        22,377
                                                   --------------------------
                                                     1,122,377     1,237,421
                                                   --------------------------

    SHAREHOLDERS' EQUITY

    Capital stock                                      766,328       753,028
                                                   --------------------------
    Contributed surplus                                 16,986        17,068
                                                   --------------------------
    Retained earnings                                  535,922       404,198
    Accumulated other comprehensive loss                (7,945)      (16,109)
                                                   --------------------------
                                                       527,977       388,089
                                                   --------------------------
                                                     1,311,291     1,158,185
                                                   --------------------------

                                                   $ 2,433,668   $ 2,395,606
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) Following the adoption of CICA Handbook Section 3064, the Company
        has restated its consolidated balance sheet as at August 31, 2009
        (see Note 1.b) of the unaudited interim consolidated financial
        statements).


    ASTRAL MEDIA INC.
    Business Segments
    for the periods ended May 31, 2010 and 2009
    (in thousands)
    (unaudited)

    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

                                   3 months                    9 months
                       --------------------------  --------------------------
                              2010          2009          2010          2009
                       ------------------------------------------------------
                                    (Restated)(1)               (Restated)(1)
    REVENUES

    Television         $   144,895   $   133,150   $   415,570   $   388,367
    Radio                   89,141        81,630       252,212       246,822
    Out-of-Home             19,561        17,757        54,781        51,109
                       ------------------------------------------------------

                       $   253,597   $   232,537   $   722,563   $   686,298
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    EBITDA(2)

    Television         $    55,840   $    54,497   $   158,646   $   139,054
    Radio                   28,948        27,335        88,459        81,226
    Out-of-Home              7,355         6,606        18,225        15,917
    Corporate Costs         (7,209)       (6,604)      (20,996)      (19,722)
                       ------------------------------------------------------

                       $    84,934   $    81,834   $   244,334   $   216,475
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    ----------------
    (1) Following the adoption of CICA Handbook Section 3064, the Company
        has restated results of operations for the three- and nine-month
        periods ended May 31, 2009 (see Note 1.b) of the unaudited interim
        consolidated financial statements).
    (2) See Appendix 1.


    ASTRAL MEDIA INC.
    Appendix 1
    Supplementary Measures
    for the periods ended May 31, 2010 and 2009
    (unaudited)

    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    
</pre>
<p/>
<p>In addition to discussing 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:</p>
<p>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 restructuring charges are 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.</p>
<p>The following table reconciles GAAP measures disclosed in the unaudited interim consolidated statements of earnings for the periods ended <span class="xn-chron">May 31, 2010</span> and 2009 to EBITDA:</p>
<p/>
<pre>
    
                                   3 months                    9 months
                       ------------------------------------------------------
    (in thousands of $)       2010          2009          2010          2009
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                    (Restated)(1)               (Restated)(1)
    Earnings before
     income taxes            70,404       65,459       200,983       164,423
    Depreciation and
     amortization             8,021        6,833        23,039        19,755
    Interest expense,
     net                      6,509        8,926        20,312        28,990
    Restructuring
     charges                      -          616             -         3,307
    -------------------------------------------------------------------------
    EBITDA                   84,934       81,834       244,334       216,475
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    
</pre>
<p/>
<p>Net earnings and basic earnings per share before the impact of future income tax rate changes. These measures provide 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.</p>
<p>The following tables reconcile GAAP measures disclosed in the unaudited interim consolidated statements of earnings for the periods ended <span class="xn-chron">May 31, 2010</span> and 2009 to net earnings and basic earnings per share, before the impact of future income tax rate changes.</p>
<p/>
<pre>
    
                                   3 months                    9 months
                       ------------------------------------------------------
    (in thousands of $)       2010          2009          2010          2009
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                    (Restated)(1)               (Restated)(1)
    Net earnings            48,457        44,269       146,741       110,977
    Future income
     tax recovery
     resulting from
     income tax rate
     changes                     -             -        (8,397)            -
    -------------------------------------------------------------------------
    Net earnings
     before the
     impact of future
     income tax rate
     changes                48,457        44,269       138,344       110,977
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


                                   3 months                    9 months
                       ------------------------------------------------------
    (in dollars)              2010          2009          2010          2009
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                    (Restated)(1)               (Restated)(1)
    Basic earnings
     per share                0.86          0.79          2.60          1.98
    Impact of future
     income tax rate
     changes                     -             -         (0.15)            -
    Basic earnings
     per share, before
     the impact of
     future income
     tax rate changes         0.86          0.79          2.45          1.98
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    
</pre>
<p/>
<p>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.</p>
<p/>
<p>The following table reconciles GAAP measures disclosed in the unaudited interim consolidated statements of cash flows for the periods ended <span class="xn-chron">May 31, 2010</span> and 2009 to cash flow from operations:</p>
<p/>
<pre>
    
                                   3 months                    9 months
                       ------------------------------------------------------
    (in thousands of $)       2010          2009          2010          2009
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                    (Restated)(1)               (Restated)(1)
    Cash provided
     by operating
     activities             51,268        65,868       136,286       159,194
    Net change in
     non-cash
     operating items        13,303        (7,275)       33,582       (11,805)
    -------------------------------------------------------------------------
    Cash flow from
     operations             64,571        58,593       169,868       147,389
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    
</pre>
<p/>
<p>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.</p>
<p/>
<pre>
    
    (1) Following the adoption of CICA Handbook Section 3064, the Company
        has restated results of operations for the three- and nine-month
        periods ended May 31, 2009 (see Note 1.b) of the unaudited interim
        consolidated financial statements).
    

For further information: 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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