Astral Media starts fiscal 2010 with robust first quarter results


    
    - 3% revenue growth and 28% increase in EBITDA(1, 3, 4)
    - 42% increase in net earnings(2, 3, 4) and 41% increase in EPS (basic)
      (2, 3, 4)(22% and 21% respectively, excluding the reversal of Part II
      fees in Fiscal 2010)(2, 4)
    
</pre>
<p/>
<p><location>MONTREAL</location>, <chron>Jan. 14</chron> /CNW Telbec/ - Astral Media Inc. (TSX: ACM.A/ACM.B) today reported robust financial results for the quarter ended <chron>November 30, 2009</chron>, which saw continued growth in revenues, EBITDA(1), net earnings, EPS, and cash flow from operations(4, 5).</p>
<p>Consolidated revenues totalled <money>$250.7 million</money> for the first quarter, an increase of 3% over the <money>$244.5 million</money> recorded last year for the same period. EBITDA(1, 3) for the first three months increased by 28% to <money>$96.8 million</money>(3) from <money>$75.5 million</money>(4) for the same quarter last year. Consolidated net earnings(2) for the first three months of Fiscal 2010 increased by 42% over last year, rising to <money>$56.2 million</money>(2, 3) (<money>$1.00</money> per share) from <money>$39.6 million</money>(4) (<money>$0.71</money> per share) last year. Cash flow from operations(5) rose by 18% to <money>$59.6 million</money> for the first quarter compared to <money>$50.7 million</money>(4) for the same period last year.</p>
<p>"Our relentless focus on execution and on offering our consumers and advertisers the best media products in pay and specialty television, radio and outdoor advertising contributed to an impressive start to this new fiscal year," said <person>Ian Greenberg</person>, President and Chief Executive Officer. "Despite the economic challenges the industry has faced this past year, our sustained investments in branding, programming and sales initiatives have started to yield tangible benefits and have helped to further strengthen the customer experience across our brands and platforms. Other initiatives, such as the launch of online programming with Bell TV, new HD channels, the deployment of Canada's first national digital outdoor advertising network as well as the return of "Les Grandes Gueules" on the NRJ network this month, should have a positive impact on our results in Fiscal 2010."</p>
<p/>
<pre>
    
    OPERATIONAL HIGHLIGHTS

    Television
    - Revenue growth of 6%;
    - EBITDA(1) growth of 29%(3, 4);
    - Advertising revenues up 1% and subscriber-related revenues increase of
      8%;
    - Launch of The Movie Network OnLine, Family OnLine and Playhouse Disney
      OnLine services with Bell TV;
    - Launch of two new HD channels, MExcess HD and MFun! HD, offered free-
      of-charge since December 2, 2009 to subscribers of The Movie Network.

    Radio
    - Revenue decrease of 1%;
    - EBITDA(1) growth of 29%(3, 4);
    - Announcement of the return of "Les Grandes Gueules" on NRJ, Canada's
      most popular radio show for several years;
    - Rebranding of EZ Rock 97.3 FM in Toronto to boom 97.3 in December, with
      a new format and a revised personality lineup.

    Outdoor Advertising
    - Revenue decrease of 4%;
    - EBITDA(1) stable;
    - Deployment of a national Digital outdoor advertising network with the
      addition of nine new faces in Vancouver and two new faces in Toronto.

    Corporate
    - In October, the Canadian Association of Broadcasters announced a
      settlement agreement with the Government of Canada pertaining to the
      regulation of Part II licence fees. Consequently, the Company reversed
      accrued expenses of $11.6 million in the first quarter of Fiscal 2010;
    - Renewal of the normal course issuer bid to repurchase up to 2.5% of
      outstanding Class A Shares and Class B Shares announced on December 9,
      2009;
    - Declaration of a semi-annual dividend of twenty-five cents (25 cents)
      per share.
    
</pre>
<p/>
<p>The unaudited interim consolidated financial statements and related notes and Management's Discussion and Analysis are available on the Company's website: <a href="http://www.astralmedia.com">www.astralmedia.com</a>.</p>
<p>There will be a conference call with analysts and media at <chron>10:30 a.m.</chron> on <chron>Thursday, January 14, 2010</chron>. To access the conference call dial 1-888-231-8191. The conference call will also be broadcast live and archived for a three-month period on the Astral Media website at <a href="http://www.astralmedia.com">www.astralmedia.com</a>.</p>
<p/>
<p>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.</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. Except as required under applicable securities regulations, 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. 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.
    3. 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.
    4. After the restatement of Fiscal 2009 figures following the adoption of
       Section 3064 of the Canadian Institute of Chartered Accountants'
       ("CICA") Handbook. See details in the Management's Discussion and
       Analysis.
    5. See Appendix 1.


    ASTRAL MEDIA INC.
    Interim Consolidated Statements of Earnings
    for the three months ended
    (in thousands of Canadian dollars except for per-share data)
    (unaudited)
    -------------------------------------------------------------------------

                                                           November 30
                                                   --------------------------
                                                           2009         2008
                                                   --------------------------
                                                                (Restated)(1)

    Revenues                                        $   250,685  $   244,483

    Operating expenses                                  153,872      169,028
                                                   --------------------------

    EBITDA(2)                                            96,813       75,455

      Depreciation                                        6,140        5,294
      Amortization of intangible assets                   1,444        1,102
      Interest expense, net                               7,189       10,518
                                                   --------------------------

    Earnings before income taxes                         82,040       58,541
                                                   --------------------------

    Income tax provision before undernoted               25,796       18,936
    Future income tax recovery resulting from
     income tax rate changes                             (8,397)           -
                                                   --------------------------
                                                         17,399       18,936
                                                   --------------------------

    Net earnings                                    $    64,641  $    39,605
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Earnings per share
      - Basic                                       $      1.15  $      0.71
      - Diluted                                     $      1.14  $      0.70
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    -------------------
    (1) Following the adoption of Canadian Institute of Chartered
        Accountants' ("CICA") Handbook Section 3064, the Company has restated
        results of operations for the three-month period ended November 30,
        2008 (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 three months ended
    (in thousands of Canadian dollars)
    (unaudited)
    -------------------------------------------------------------------------

                                                           November 30
                                                   --------------------------
                                                           2009         2008
                                                   --------------------------
                                                                (Restated)(1)

    Cash and cash equivalents provided by (used for):

    OPERATING ACTIVITIES
      Net earnings                                  $    64,641  $    39,605

      Non-cash charges (credits):
        Part II licence fees accrual reversal           (11,552)           -
        Stock-based compensation costs                    2,143        1,711
        Depreciation and amortization                     7,584        6,396
        Imputed interest on other non-current
         liabilities                                        559          659
        Amortization of deferred financing costs            171          172
        Future income tax expense before undernoted       4,458        2,179
        Future income tax recovery resulting from
         income tax rate changes                         (8,397)           -
                                                   --------------------------

      Cash flow from operations(2)                       59,607       50,722

      Net change in non-cash operating items            (32,534)     (16,234)
                                                   --------------------------

      Cash flow from operating activities                27,073       34,488
                                                   --------------------------

    INVESTING ACTIVITIES
      Short-term investments - cashed                         -        9,962
      Additions to property, plant and equipment         (9,044)     (10,206)
      Additions to other intangible and non-current
       assets                                            (1,531)        (704)
      Business acquisition, net of cash acquired              -       (2,787)
                                                   --------------------------
                                                        (10,575)      (3,735)
                                                   --------------------------

    FINANCING ACTIVITIES
      Repayment of long-term debt                       (10,000)     (10,000)
      Stock options exercised                               840           80
                                                   --------------------------
                                                         (9,160)      (9,920)
                                                   --------------------------

    Net change in cash and cash equivalents               7,338       20,833
    Cash and cash equivalents (bank overdraft)
    - beginning of period                                23,100       (3,644)
    Cash and cash equivalents - end of period       $    30,438  $    17,189
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    (1) Following the adoption of CICA Handbook Section 3064, the Company has
        restated results of operations for the three-month period ended
        November 30, 2008 (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)
    -------------------------------------------------------------------------

                                                    November 30,   August 31,
                                                   --------------------------
                                                           2009         2009
                                                   --------------------------
                                                                (Restated)(1)
    ASSETS

    Current
      Cash and cash equivalents                     $    30,438  $    23,100
      Accounts receivable                               165,070      143,803
      Program and film rights                            99,026       92,545
      Prepaid expenses and other current assets          29,026       27,904
                                                   --------------------------
                                                        323,560      287,352

    Program and film rights                              65,088       61,219
    Property, plant and equipment                       153,533      151,637
    Broadcast licences                                1,408,037    1,408,037
    Goodwill                                            356,945      356,945
    Other intangible and non-current assets              50,594       50,894
    Future income tax assets                             71,295       79,522
                                                   --------------------------

                                                    $ 2,429,052  $ 2,395,606
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    LIABILITIES

    Current
      Accounts payable and accrued liabilities      $   114,857  $   138,771
      Income taxes payable                               15,326       12,191
      Program and film rights payable                    66,573       58,220
      Future income tax liabilities                       4,318        4,481
                                                   --------------------------
                                                        201,074      213,663


    Long-term debt                                      682,932      692,761
    Future income tax liabilities                       232,124      243,353
    Other non-current liabilities                        65,514       65,267
    Derivative financial instruments                     20,032       22,377
                                                   --------------------------
                                                      1,201,676    1,237,421
                                                   --------------------------

    SHAREHOLDERS' EQUITY

    Capital stock                                       757,255      753,028
                                                   --------------------------
    Contributed surplus                                  15,824       17,068
                                                   --------------------------
    Retained earnings                                   468,835      404,198
    Accumulated other comprehensive loss                (14,538)     (16,109)
                                                   --------------------------
                                                        454,297      388,089
                                                   --------------------------
                                                      1,227,376    1,158,185
                                                   --------------------------

                                                    $ 2,429,052  $ 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 three months ended November 30,
    (in thousands of Canadian dollars)
    (unaudited)
    -------------------------------------------------------------------------

                                                           2009         2008
                                                   --------------------------
                                                                (Restated)(1)

    REVENUES

    Television                                      $   141,227  $   133,439
    Radio                                                89,165       89,858
    Outdoor Advertising                                  20,293       21,186
                                                   --------------------------

                                                    $   250,685  $   244,483
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    EBITDA(2)

    Television                                      $    56,608  $    43,908
    Radio                                                39,536       30,656
    Outdoor Advertising                                   7,779        7,816
    Corporate                                            (7,110)      (6,925)
                                                   --------------------------

                                                    $    96,813  $    75,455
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    -----------------------------
    (1) Following the adoption of CICA Handbook Section 3064, the Company has
        restated results of operations for the three-month period ended
        November 30, 2008 (see Note 1.b) of the unaudited interim
        consolidated financial statements).
    (2) See Appendix 1.


    ASTRAL MEDIA INC.
    Appendix 1
    Supplementary Measures
    for the three-month periods ended
    (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.
EBITDA is also an indicator widely used for business valuation purposes.
EBITDA margin is defined as the ratio obtained by dividing EBITDA by revenues.
    The following table reconciles GAAP measures disclosed in the unaudited
interim consolidated statements of earnings for the periods ended November 30,
2009 and 2008 to EBITDA:


                                                           November 30
                                                   --------------------------
    (in thousands of $)                                    2009         2008
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                                                (Restated)(1)
    Earnings before income taxes                         82,040       58,541
    Depreciation and amortization                         7,584        6,396
    Interest expense, net                                 7,189       10,518
    -------------------------------------------------------------------------
    EBITDA                                               96,813       75,455
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    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.
    The following tables reconcile GAAP measures disclosed in the unaudited
interim consolidated statements of earnings for the periods ended November 30,
2009 and 2008 to net earnings and basic earnings per share, before the impact
of future income tax rate changes.

                                                           November 30
                                                   --------------------------
    (in thousands of $)                                    2009         2008
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                                                (Restated)(1)
    Net earnings                                         64,641       39,605
    Future income tax recovery resulting from future
     income tax rate changes                             (8,397)           -
    -------------------------------------------------------------------------
    Net earnings before the impact of future income
     tax rate changes                                    56,244       39,605
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

                                                           November 30
                                                   --------------------------
    (in thousands of $)                                    2009         2008
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                                                (Restated)(1)
    Basic earnings per share                               1.15         0.71
    Impact of future income tax rate changes              (0.15)           -
    Basic earnings per share, before the impact of
    -------------------------------------------------------------------------
     future income tax rate changes                        1.00         0.71
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    (1) Following the adoption of CICA Handbook Section 3064, the Company has
        restated results of operations for the three-month period ended
        November 30, 2008 (see Note 1.b) of the unaudited interim
        consolidated financial statements).


    Cash flow from operations is defined as cash flow from operating
activities before the net change in non-cash operating items. This measure
provides an indication of the Company's ability to generate cash flows without
considering certain timing and other factors causing variations in non-cash
operating items.
    The following table reconciles GAAP measures disclosed in the unaudited
interim consolidated statements of cash flows for the periods ended November
30, 2009 and 2008 to cash flow from operations:

                                                           November 30
                                                   --------------------------
    (in thousands of $)                                    2009         2008
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                                                (Restated)(1)
    Cash flow from operating activities                  27,073       34,488
    Net change in non-cash operating items               32,534       16,234
    -------------------------------------------------------------------------
    Cash flow from operations                            59,607       50,722
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    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.

    (1) Following the adoption of CICA Handbook Section 3064, the Company has
        restated results of operations for the three-month period ended
        November 30, 2008 (see Note 1.b) of the unaudited interim
        consolidated financial statements).
    

For further information: For further information: Medias: Alain Bergeron, Vice-President, Corporate communications and Chief Marketing Officer, Astral Media Inc., (514) 939-5000; Financial Analysts: Claude Gagnon, Senior Vice-President and Chief Financial Officer, Astral Media Inc., (514) 939-5000

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