Astral Media reports strong year-end results and reaches new milestones

    
      Revenues break $900 million mark and EBITDA(2) reaches $300 million

     Record net earnings from continuing operations(1) and basic EPS from
                    continuing operations(1) for the year
        Record $216.6 million in cash flow from continuing operations(4) for
                                   the year
     Non-cash net impairment charge on radio broadcast licences of $317.5
                                   million
    

MONTREAL, Oct. 27 /CNW Telbec/ - Astral Media Inc. (TSX: ACM.A/ACM.B) today reported its financial results for the fourth quarter and year ended August 31, 2009.

Consolidated revenues totalled $905.7 million for Fiscal 2009, an increase of 5% over the $865.4 million recorded in Fiscal 2008. Consolidated revenues were $219.4 million for the fourth quarter of Fiscal 2009, a 5% decrease from the $229.9 million recorded in the same quarter last year. EBITDA(2) for the year increased by 4% to $300.4 million, from $289.6 million last year. EBITDA(2) declined 5% to $76.7 million in the fourth quarter of Fiscal 2009 compared to $81.1 million for the same quarter last year. Advertising revenue and EBITDA(2) growth in the fourth quarter and the year was constrained by the fact that the broadcasting calendar in Fiscal 2009 included one less week, for a total of 52 weeks, compared to 53 weeks in Fiscal 2008.

Consolidated net earnings from continuing operations, before the impairment charge on broadcast licences and future income tax recoveries, grew 6% in Fiscal 2009 to $159.5 million(1) ($2.84 per share)(1) compared to 150.5 million(3) ($2.67 per share)(3) last year. For the fourth quarter, excluding the impairment charge, net earnings from continuing operations grew 7% to $43.9 million(1) ($0.78 per share)(1) in Fiscal 2009, from $40.8 million ($0.72 per share) last year. Cash flow from continuing operations(4) grew 5% to $216.6 million for the year, compared to $205.3 million for Fiscal 2008. Cash flow from continuing operations(4) grew by 3% to $62.1 million in the fourth quarter, compared to $60.1 million for the same quarter last year.

"I am delighted by Astral's effective response to the effects of the current economic downturn which has adversely affected advertising markets across the country. I am particularly pleased with the performance and continued contribution of each of our business units, that enabled Astral to grow despite these challenging times, and to reach new milestones with record revenues, EBITDA(2), and cash flows in Fiscal 2009," said Ian Greenberg, President and Chief Executive Officer.

"Our operational discipline during this downturn allowed us to gain efficiencies and to further deleverage our balance sheet by reducing debt by $120 million. We also continued to invest strategically in new programming and branding initiatives such as the launches of HBO Canada, Virgin Radio and NRJ, as well as the deployment of our national Digital outdoor advertising network in Canada's top three advertising markets of Montréal, Toronto and Vancouver. Our continued focus on product development combined with our visual rigor are key factors which position us to fully benefit from an economic recovery," added Mr. Greenberg.

    
    FINANCIAL AND OPERATIONAL HIGHLIGHTS FOR FISCAL 2009 (12-month period)

    Television
    - Revenue growth of 3% to $513.3 million;
    - Specialty-television subscriber revenue growth of 7%;
    - Pay-television subscriber revenue growth of 6%;
    - Advertising revenue decline of 4% explained in part by one less week in
      Fiscal 2009 compared to the Fiscal 2008 broadcasting calendar;
    - EBITDA(2) growth of 5% to $188.4 million;
    - Launch of HBO Canada.

    Radio
    - Revenue growth of 9% to $323.0 million partly explained by an
      additional two-month contribution in Fiscal 2009 of the assets acquired
      from Standard Radio;
    - Granting by the CRTC of a radio licence in the Ottawa-Gatineau market;
    - Rebranding of 18 radio stations, including the integration of global
      radio brands Virgin Radio and NRJ.

    Outdoor Advertising
    - Revenue decline of 4% to $69.5 million explained in part by one less
      week in Fiscal 2009 compared to the Fiscal 2008 broadcasting calendar;
    - EBITDA(2) growth of 11% to $26.2 million;
    - Launch of a new Digital outdoor advertising network.
    

In the fourth quarter of Fiscal 2009, in accordance with current accounting requirements, the Company recorded a $317.5 million (net of future income tax recovery of $82.0 million) non-cash net impairment charge on its radio broadcast licences. It is important to note that this impairment charge has no impact on the current or future operations of the Company. Including the net impairment charge, the Company incurred a consolidated net loss from continuing operations of $158.0 million (loss of $2.82 per share) in Fiscal 2009 compared to net earnings of $178.7 million ($3.18 per share) last year. For the fourth quarter, the net loss from continuing operations was $273.6 million (loss of $4.87 per share), compared to net earnings of $40.8 million ($0.72 per share) last year.

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

There will be a conference call with analysts and media at 2:00 p.m. on Tuesday, October 27, 2009. To access the conference call dial 1-800-732-1073. The conference call will also be broadcast live and archived for a three-month period on the Astral Media website at www.astralmedia.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. We disclaim any intention or obligation to update or revise any forward-looking statements.

Astral Media is a leading Canadian media company, active in specialty and pay television, radio, outdoor advertising and interactive media. Astral Media's solid and dynamic presence in the country's major markets rests on its commitment to offer a unique combination of high-quality, targeted media for all its audiences. For more details, visit www.astralmedia.com.

    
    1. Excluding the impact of the $317.5 million ($5.66 per share) non-cash
       net impairment charge on the Company's radio broadcast licences. See
       Appendix 1.
    2. EBITDA is defined as earnings before interest, taxes, depreciation and
       amortization, and excludes restructuring charges. See Appendix 1.
    3. Excluding the favourable impact of the $28.3 million ($0.51 per share)
       non-cash future income tax recovery resulting from enacted income tax
       rate changes. See Appendix 1.
    4. See Appendix 1.


    ASTRAL MEDIA INC.
    Consolidated Statements of Earnings
    for the periods ended August 31, 2009 and 2008
    (in thousands of Canadian dollars except for per-share data)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

                                        3 months               12 months
                              ----------------------- -----------------------
                                    2009        2008        2009        2008
                              -----------------------------------------------
                                     (unaudited)

    Revenues                  $  219,427  $  229,872  $  905,725  $  865,370

    Operating expenses           142,691     148,818     605,346     575,792
                              -----------------------------------------------
    EBITDA(1)                     76,736      81,054     300,379     289,578

      Depreciation                 5,941       6,068      24,764      21,617
      Amortization of
       intangible assets           1,116         318       2,756       1,195
      Interest expense, net        7,978      11,101      36,968      37,465
      Restructuring charges        1,076           -       4,383           -
                              -----------------------------------------------

    Earnings from con-
     tinuing operations
     before undernoted(1)         60,625      63,567     231,508     229,301
                              -----------------------------------------------
    Impairment charge on
     broadcast licences          399,459           -     399,459           -
                              -----------------------------------------------
    Earnings (loss) from
     continuing operations
     before income taxes        (338,834)     63,567    (167,951)    229,301
                              -----------------------------------------------
    Income tax provision
     before undernoted            16,773      22,761      72,044      78,839
    Future income tax
     recovery resulting
     from impairment
     charge on broadcast
     licences                    (81,970)          -     (81,970)          -
    Future income tax
     recovery resulting
     from income tax rate
     changes                           -           -           -     (28,259)
                              -----------------------------------------------
                                 (65,197)     22,761      (9,926)     50,580
                              -----------------------------------------------
    Net earnings (net loss)
     from continuing
     operations                 (273,637)     40,806    (158,025)    178,721

    Net loss from dis-
     continued operations              -      (1,868)          -      (1,711)
                              -----------------------------------------------
    Net earnings (net
     loss)                    $ (273,637) $   38,938  $ (158,025) $  177,010
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Earnings (loss)
     per share from
     continuing
     operations
      - Basic                 $    (4.87) $     0.72  $    (2.82) $     3.18
                              -----------------------------------------------
      - Diluted               $    (4.87) $     0.72  $    (2.82) $     3.12
                              -----------------------------------------------

    Earnings (loss)
     per share
      - Basic                 $    (4.87) $     0.69  $    (2.82) $     3.15
                              -----------------------------------------------
      - Diluted               $    (4.87) $     0.68  $    (2.82) $     3.09
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Weighted average
     number of shares
     outstanding -
     basic (in
     thousands)                   56,170      56,362      56,100      56,257
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    -------------------
    (1) See Appendix 1


    ASTRAL MEDIA INC.
    Consolidated Statements of Cash Flows
    for the periods ended August 31, 2009 and 2008
    (in thousands of Canadian dollars)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

                                        3 months               12 months
                              ----------------------- -----------------------
                                    2009        2008        2009        2008
                              -----------------------------------------------
                                     (unaudited)
    Cash and cash equi-
     valents provided
     by (used for):
    OPERATING ACTIVITIES
      Net earnings
       (net loss) from
        continuing
        operations            $ (273,637) $   40,806  $ (158,025) $  178,721
      Non-cash charges
       (credits):
        Depreciation
         and amorti-
         zation                    7,057       6,386      27,520      22,812
        Stock-based
         compensation              1,141       1,415       5,912       6,270
        Impairment
         charge on
         broadcast
         licences                399,459           -     399,459           -
        Future income
         tax expense
         (recovery)
          net before
          undernoted             (72,857)     10,533     (61,564)     22,715
        Future income
         tax recovery
         resulting from
         income tax rate
         changes                       -           -           -     (28,259)
        Imputed interest
         on other
         non-current
         liabilities                 734         743       2,637       2,507
        Amortization
         of deferred
         financing
         costs                       172         172         687         576
                              -----------------------------------------------
      Cash flow from
       continuing
       operations(1)              62,069      60,055     216,626     205,342
      Net change in
       non-cash
       operating
       items                        (545)     (4,263)     12,712     (56,352)
                              -----------------------------------------------
      Cash flow from
       continuing
       operating
       activities                 61,524      55,792     229,338     148,990
                              -----------------------------------------------
    DISCONTINUED
     OPERATIONS                      (63)       (237)     (1,677)       (591)
                              -----------------------------------------------
    INVESTING
     ACTIVITIES
      Short-term
       investments -
       purchased                       -      (9,962)          -      (9,962)
      Short-term
       investments -
       cashed                          -           -       9,962      51,128
      Additions to
       property, plant
       and equipment             (17,603)    (18,036)    (51,304)    (35,995)
      Additions to
       other non-
       current assets               (326)       (733)    (10,358)     (2,685)
      Business
       acquisition,
       net of cash
       acquired                        -      (3,040)     (2,787)   (907,156)
                              -----------------------------------------------
                                 (17,929)    (31,771)    (54,487)   (904,670)
                              -----------------------------------------------

    FINANCING ACTIVITIES
      Deferred
       financing costs                 -           -           -      (2,835)
      Increase in
       long-term debt                  -           -           -     825,000
      Repayment of
       long-term debt            (45,000)    (10,000)   (120,000)    (10,000)
      Shares
       repurchased                     -     (28,502)          -     (55,416)
      Stock options
       exercised                     151         226       1,654       3,182
      Dividends                  (14,046)    (14,144)    (28,084)    (28,541)
                              -----------------------------------------------
                                 (58,895)    (52,420)   (146,430)    731,390
                              -----------------------------------------------
    Net change in
     cash and cash
     equivalents                 (15,363)    (28,636)     26,744     (24,881)
    Cash and cash
     equivalents
     (bank overdraft)
     - beginning of
     period                       38,463      24,992      (3,644)     21,237
                              -----------------------------------------------
    Cash and cash
     equivalents
     (bank overdraft)
     - end of period          $   23,100  $   (3,644) $   23,100  $   (3,644)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    -------------------
    (1) See Appendix 1


    ASTRAL MEDIA INC.
    Consolidated Balance Sheets as at August 31
    (in thousands of Canadian dollars)
    -------------------------------------------------------------------------


                                                          2009         2008
                                                   --------------------------
    ASSETS

    Current
      Cash and cash equivalents                    $    23,100   $         -
      Short-term investments                                 -         9,962
      Accounts receivable                              143,803       155,841
      Income taxes receivable                                -           919
      Program and film rights                           92,545        79,305
      Prepaid expenses and other current assets         28,273        28,954
                                                   --------------------------
                                                       287,721       274,981

    Program and film rights                             61,219        69,502
    Other non-current assets                            52,828        47,751
    Property, plant and equipment                      158,960       133,484
    Broadcast licences                               1,408,037     1,807,496
    Goodwill                                           356,945       356,945
    Future income tax assets                            79,522        26,448
                                                   --------------------------
                                                   $ 2,405,232   $ 2,716,607
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    LIABILITIES

    Current
      Bank overdraft                               $         -   $     3,644
      Accounts payable and accrued liabilities         138,771       129,906
      Income taxes payable                              12,191             -
      Program and film rights payable                   58,220        64,060
      Future income tax liabilities                      4,481         5,951
                                                   --------------------------
                                                       213,663       203,561

    Long-term debt                                     692,761       812,074
    Future income tax liabilities                      246,098       254,912
    Other non-current liabilities                       64,196        78,445
    Derivative financial instruments                    22,377        18,374
    Liabilities of discontinued operations               1,071         2,748
                                                   --------------------------
                                                     1,240,166     1,370,114
                                                   --------------------------
    SHAREHOLDERS' EQUITY

    Capital stock                                      753,028       748,121
                                                   --------------------------
    Contributed surplus                                 17,068        14,409
                                                   --------------------------
    Retained earnings                                  411,079       597,188
    Accumulated other comprehensive loss               (16,109)      (13,225)
                                                   --------------------------
                                                       394,970       583,963
                                                   --------------------------
                                                     1,165,066     1,346,493
                                                   --------------------------
                                                   $ 2,405,232   $ 2,716,607
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    ASTRAL MEDIA INC.
    Business Segments
    for the periods ended August 31
    (in thousands)

                                        3 months               12 months
                              ----------------------- -----------------------
                                    2009        2008        2009        2008
                              -----------------------------------------------
                                     (unaudited)
    REVENUES

    Television                $  124,898  $  119,786  $  513,265  $  497,007
    Radio                         76,180      88,720     323,002     296,302
    Outdoor Advertising           18,349      21,366      69,458      72,061
                              -----------------------------------------------

                              $  219,427  $  229,872  $  905,725  $  865,370
    -------------------------------------------------------------------------

    EBITDA(1)

    Television                $   42,756  $   41,815  $  188,445  $  179,513
    Radio                         28,607      37,191     110,366     111,140
    Outdoor Advertising           10,258       8,370      26,175      23,645
    Corporate Costs               (4,885)     (6,322)    (24,607)    (24,720)
                              -----------------------------------------------

                              $   76,736  $   81,054  $  300,379  $  289,578
    -------------------------------------------------------------------------

    -------------------
    (1) See Appendix 1


    ASTRAL MEDIA INC.
    Appendix 1
    Supplementary Measures
    for the periods ended August 31, 2009 and 2008
    (unaudited)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

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:

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 and the impairment charge on broadcast licences 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.

The following table reconciles GAAP measures disclosed in the consolidated statements of earnings for the periods ended August 31, 2009 and 2008 to EBITDA:

    
                                        3 months               12 months
                              ----------------------- -----------------------
    (in thousands of $)             2009        2008        2009        2008
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Earnings (loss) from
     continuing operations
     before income taxes        (338,834)     63,567    (167,951)    229,301
    Impairment charge on
     broadcast licences          399,459           -     399,459           -
    Depreciation and
     amortization                  7,057       6,386      27,520      22,812
    Interest expense, net          7,978      11,101      36,968      37,465
    Restructuring charges          1,076           -       4,383           -
    -------------------------------------------------------------------------
    EBITDA                        76,736      81,054     300,379     289,578
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

Earnings from continuing operations before undernoted. This measure provides an indication of the Company's ability to generate earnings and cash flows from its ongoing operations, by excluding the impact of the non-cash impairment charge on broadcast licences.

The following table reconciles GAAP measures disclosed in the consolidated statements of earnings for the periods ended August 31, 2009 and 2008 to earnings from continuing operations before undernoted:

    
                                        3 months               12 months
                              ----------------------- -----------------------
    (in thousands of $)             2009        2008        2009        2008
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Earnings (loss) from
     continuing operations
     before income taxes        (338,834)     63,567    (167,951)    229,301
    Impairment charge on
     broadcast licences          399,459           -     399,459           -
    -------------------------------------------------------------------------
    Earnings from continuing
     operations before
     undernoted                   60,625      63,567     231,508     229,301
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

Net earnings and basic earnings per share from continuing operations before impairment of broadcast licences and future income tax recoveries. 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 and the impact of the non-cash impairment charge on broadcast licences.

The following tables reconcile GAAP measures disclosed in the consolidated statements of earnings for the periods ended August 31, 2009 and 2008 to net earnings and basic earnings per share from continuing operations, before impairment of broadcast licences and future income tax recoveries:

    
                                        3 months               12 months
                              ----------------------- -----------------------
    (in thousands of $)             2009        2008        2009        2008
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Net earnings (net loss)
     from continuing
     operations                 (273,637)     40,806    (158,025)    178,721
    Impairment charge on
     broadcast licences          399,459           -     399,459           -
    Future income tax
     recovery resulting
     from impairment charge
     on broadcast licences       (81,970)          -     (81,970)          -
    Future income tax
     recovery resulting
     from income tax rate
     changes                            -          -           -     (28,259)
    -------------------------------------------------------------------------
    Net earnings from
     continuing operations
     before impairment of
     broadcast licences and
     future income tax
     recoveries                   43,852      40,806     159,464     150,462
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

                                        3 months               12 months
                              ----------------------- -----------------------
    (in thousands of $)             2009        2008        2009        2008
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Basic earnings (loss)
     per share from
     continuing operations         (4.87)       0.72       (2.82)       3.18
    Impairment charge on
     broadcast licences             7.11           -        7.12           -
    Future income tax
     recovery resulting
     from impairment charge
     on broadcast licences         (1.46)          -       (1.46)          -
    Future income tax
     recovery resulting
     from income tax rate
     changes                           -           -           -       (0.51)
    -------------------------------------------------------------------------
    Basic earnings per share
     from continuing
     operations before
     impairment of broadcast
     licences and future
     income tax recoveries          0.78        0.72        2.84        2.67
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

Cash flow from continuing operations is defined as cash flow from continuing 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 consolidated statements of cash flows for the periods ended August 31, 2009 and 2008 to cash flow from continuing operations:

    
                                        3 months               12 months
                              ----------------------- -----------------------
    (in thousands of $)             2009        2008        2009        2008
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Cash flow from continuing
     operating activities         61,524      55,792     229,338     148,990
    Net change in non-cash
     operating items                 545       4,263     (12,712)     56,352
    -------------------------------------------------------------------------
    Cash flow from continuing
     operations                   62,069      60,055     216,626     205,342
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

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: For further information: Media: Alain Bergeron, Vice-President, Brand Management and Chief Marketing Officer, 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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