40 per cent growth in self-paying subscribers
39 per cent growth in total revenue Third consecutive quarter
of Pre-Marketing Adjusted Operating Profit(1)
TORONTO, April 8 /CNW/ - Canadian Satellite Radio Holdings Inc., parent
company of XM Canada ("CSR" or the "Company") (TSX: XSR), today announced its
financial results for the second fiscal 2009 quarter ended February 28, 2009.
Second Quarter 2009 Financial Highlights
Three months ended February 28, 2009 versus three months ended
February 29, 2008
- 39 per cent increase in total revenue
- 40 per cent growth in self-paying subscribers (from 251,400 in 2008 to
351,200 in 2009)
- Improved Pre-Marketing Adjusted Operating Profit to $0.3 million
from loss of ($1.6 million)
- Improved net loss (before foreign exchange gain/loss) by $2.0 million
or 10 per cent
"Our results are encouraging considering these challenging economic
times," said Michael Moskowitz, President and Chief Executive Officer of XM
Canada. "Satellite radio offers a high level of entertainment at a very
attractive price and, as a result, consumers continue to adopt the great, high
quality listening experience of XM. We continue to grow revenue and increase
the number of self-paying subscribers. We are focused on executing against our
business plan, which means pursuing a number of key growth initiatives and
opportunities and managing costs across every level of the business in order
to achieve our two key long-term objectives: sustainable cash flow and
Recent Business Highlights
- General Motors Canada announced a new incentive program called GM
Total Confidence, which includes a two-year paid XM satellite radio
subscription as well as other incentives to encourage people to enter
the car buying market again. The promotion commenced February 18, 2009
and further demonstrates GM's commitment to XM as well as XM satellite
radio's appeal to consumers.
- Toyota commences factory installations of XM Canada satellite radio in
five models in 2009, including the all new Toyota VENZA, with plans to
include the Lexus RX350 in 2010.
- As part of its focus to reduce costs and improve efficiencies, XM
Canada selects SYNNEX Canada, a leading distributor of technology
products, to be its exclusive supplier of aftermarket XM satellite
radio products in Canada.
- XM continues to be one of the biggest supporters of Canadian music,
most recently through its live-to-air broadcast of The Independent
Music Awards on The Verge (XM Canada's rock channel 87) and by
providing grants for Canadian musicians to attend South by Southwest
2009 in Austin, Texas. The Verge featured daily broadcasts of Canadian
artists performing at the festival.
Revenue increased $3.6 million, or 39 per cent, to $12.8 million from
$9.2 million for the second quarters of 2009 and 2008, respectively. The
increase was mostly attributable to an increase in the Company's growing
subscriber base. "XM Canada's business continues to grow by approximately 40%
annually, despite the economic environment," said Michael Moskowitz, President
and Chief Executive Officer of XM Canada. "It's exciting to be part of a new
technology that Canadians are subscribing to in large numbers."
Average Monthly Subscription Revenue per Subscriber (ARPU) was $11.50 and
$11.61 for the second quarters of 2009 and 2008, respectively, representing a
decline of 1 per cent year-over-year due to the fact that there were fewer
days in the second quarter of 2009.
Adjusted Operating Profit (Loss) improved $3.0 million, to ($6.0 million)
from ($9.0 million) for the second quarters of 2009 and 2008, respectively.
The significant improvement in Adjusted Operating Profit (Loss) was driven
primarily by a $3.6 million revenue improvement and a reduction of $1.2
million in marketing expenses versus the second quarter of 2008 offset by a
$1.5 million increase in cost of revenue. As the Company continues to grow
revenue and manage costs, Adjusted Operating Profit (Loss) is expected to
continue to improve.
Pre-Marketing Adjusted Operating Profit (Loss) improved $1.9 million, to
$0.3 million from ($1.6 million) for the second quarters of 2009 and 2008,
respectively. This quarter is the third consecutive quarter in which we have
generated Pre-Marketing Adjusted Operating Profit. As the Company continues to
grow revenue and manage costs, Pre-Marketing Adjusted Operating Profit (Loss)
is expected to continue to improve.
Per Subscriber Acquisition Cost (SAC) was $78 and $63 for the second
quarters of 2009 and 2008, respectively. The increase in SAC is attributable
to a one-time charge of $0.5 million taken during the quarter to reflect the
end of life for a particular product.
Cost per Gross Addition (CPGA) was flat on a year-over-year basis.
Although total marketing costs declined significantly compared to the second
quarter of 2008, CPGA remained unchanged due to lower gross subscriber
additions in the quarter compared to the same period last year.
The non-GAAP measures above should be used in addition to, but not as a
substitute for, the analysis provided in the interim consolidated statement of
operations and deficit.
About Canadian Satellite Radio Holdings Inc.
Canadian Satellite Radio Holdings Inc. (TSX: XSR) operates as XM Canada
and is Canada's premium digital audio entertainment and information company
with the best signal coverage across the country. With 130 digital channels of
choice, XM Canada offers Canadian listeners the most unique and original
Canadian and international programming, including commercial-free music
channels, exclusive live concerts and sports coverage, and the best in talk,
comedy, children's and entertainment programming. A free seven-day trial of XM
Radio Online is available at http://www.xmradio.ca/freetrial/. Visit
www.xmradio.ca for programming and subscription information.
XM Canada is the satellite entertainment leader in the Canadian
automotive market with long-term factory installation agreements with
manufacturers that own close to 60 per cent share of the domestic vehicle
market. XM's industry-leading products are available at shop.xmradio.ca, and
at retailers nationwide.
XM programming is available by subscribing directly through XM Canada and
is also available as streams of commercial-free XM music channels on TELUS
Mobile Radio and Rogers Wireless Radio on Demand. XM Canada is the exclusive
music channel provider on Air Canada's flights and is available in select Avis
Budget Group rental vehicles.
To find out more about Canadian Satellite Radio Holdings Inc. (TSX: XSR),
visit our website at www.xmradio.ca/about/.
Certain statements included above 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, except as required by applicable law. Additional
information identifying risks and uncertainties is contained in CSR's filings
with the Canadian securities regulators, available at www.sedar.com.
CANADIAN SATELLITE RADIO HOLDINGS INC.
RECONCILIATION OF LOSS BEFORE THE UNDERNOTED
TO ADJUSTED OPERATING PROFIT (LOSS) (UNAUDITED)
Adjusted Operating Profit (Loss) is defined as operating profit (loss)
before the undernoted excluding amortization, stock-based compensation to
employees, directors, officers and service providers, and non-cash costs paid
by our parent company. We believe that Adjusted Operating Profit (Loss), as
opposed to operating profit (loss) or net profit (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 the Statement of Operations and
Deficit. We believe Adjusted Operating Profit (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 Profit (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 Profit (Loss) may not be comparable
to similarly titled measures of other companies.
Adjusted Operating Profit (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.
Pre-Marketing Adjusted Operating Profit (Loss) is defined as Adjusted
Operating Profit (Loss) adding back total marketing expenses. We believe that
Pre-Marketing Adjusted Operating Profit (Loss) is a good measure of operating
performance before investing to acquire new subscribers. This non-GAAP measure
should be used in addition to, but not as a substitute for, the analysis
provided in the Statement of Operations and Deficit. We believe Pre-Marketing
Adjusted Operating Profit (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.
($000's) Second Quarter Second Quarter
Reconciliation of loss before the
undernoted to Adjusted Operating
Profit (Loss) before the undernoted.... (12,212) (15,429)
Add back non-Adjusted Operating
Profit (Loss) items included in
loss Amortization..................... 5,576 5,570
Stock-based compensation............... 610 770
Costs paid by parent company........... 61 56
Adjusted Operating Profit (Loss)....... (5,965) (9,033)
Add total marketing.................... 6,262 7,426
Pre-Marketing Adjusted Operating
Profit (Loss)......................... 297 (1,607)
(1) Pre-Marketing Adjusted Operating Profit is defined as operating
profit (loss) before the undernoted excluding amortization, stock-
based compensation to employees, directors, officers and service
providers, and non-cash costs paid by our parent company plus total
marketing expenses. See section entitled "Operating Definitions" in
Management's Discussion & Analysis for the quarter ended February 28,
2009, which can be found at www.sedar.com.
For further information:
For further information: Investors: Morlan Reddock, (416) 408-6899,
firstname.lastname@example.org; Media: Lorena Cordoba, (416) 924-5700 Ext.