SiriusXM Canada Reports First Quarter Fiscal 2017 Results

TORONTO, Jan. 11, 2017 /CNW/ - Sirius XM Canada Holdings Inc. ("SiriusXM Canada" or the "Company") (TSX: XSR), parent of Sirius XM Canada Inc., today released the unaudited financial results for its fiscal 2017 first quarter ("Q1 FY2017") ended November 30, 2016 prepared in accordance with International Financial Reporting Standards (IFRS). A summary of IFRS financial results for Q1 FY2017 is attached. All results are reported in thousands of Canadian dollars, except for subscribers and per share amounts, unless otherwise stated.

Q1 FY2017 Financial and Operating Metrics

The figures below include certain non-GAAP measures and industry metrics. These figures are subject to the qualifications and assumptions set out in the Company's notes to such results.





Financial 1

Q1 FY2017

Q1 FY2016

% Change5


Nov 30, 2016

Nov 30, 2015



(Unaudited)

(Unaudited)


Revenue

87,216

83,517

4.4%

Adjusted EBITDA 2

24,244

23,518

3.1%

Net Income and comprehensive income

9,808

10,075

(2.7)%

Free cash flow3

13,146

10,229

28.5%





Operating




Self-Pay subscribers

2,029

1,939

4.6%

Total subscribers

2,830

2,713

4.3%

Self-Pay ARPU 4

$12.54

$12.57

(0.2)%

Subscriber Acquisition Cost (SAC)

$33

$40

(17.4)%

1 All figures in the table are in thousands except ARPU and SAC.

2 Adjusted EBITDA is a non-GAAP measure. A reconciliation of net income and comprehensive income before income tax to both EBITDA and Adjusted EBITDA is provided below.

3 Free cash flow is a non-GAAP measure. A reconciliation of free cash flow is provided below.

4 Self-Pay ARPU is derived from the total of earned subscription revenue from Self-Pay subscribers, music royalty fee, and activation fees divided by the monthly weighted average number of Self-Pay subscribers. Please see the Company's MD&A for a more detailed description.

5 Percentage variances/changes are calculated based on the exact numbers, therefore, amounts may not sum as a result of rounding in certain instances.

 

"In the quarter we continued to grow revenue and Adjusted EBITDA along with increasing our subscriber base, including strong growth from the pre-owned vehicle market", said Mark Redmond, President and CEO SiriusXM Canada. "In addition, we continued to deliver an unmatched listening experience, including the launch of VOLUME, the first 24/7 talk radio channel devoted to music, and full coverage of the NBA and NHL seasons. We are in the final stage of our Recapitalization go-private transaction and are awaiting the decision of the CRTC following its recent public consultation which concluded on January 9, 2017."

Q1 FY2017 Financial Results Review

For Q1 FY2017, revenue was $87,216, up $3,699, or 4.4%, from $83,517 in Q1 FY2016. The year-over-year improvement reflects growth in the Company's Self-Pay subscriber base. Q1 FY2017 Self-Pay ARPU was $12.54, down 0.2% from $12.57 in Q1 FY2016 due to increased promotional activity.

Adjusted EBITDA for Q1 FY2017 increased $726, or 3.1%, to $24,244 from $23,518 in Q1 FY2016. The improvement was due to higher revenue and lower subsidies and distribution costs, partly offset by higher marketing and revenue share and royalty costs.

The Company recorded net income and comprehensive income of $9,808 in Q1 FY2017, a decrease of $267, or 2.7%, compared to net income and comprehensive income of $10,075 in Q1 FY2016, which was mainly due to higher operating costs combined with depreciation and amortization, partly offset by increased revenues.

SAC for Q1 FY2017 was $33 down $7 from $40 in Q1 FY2016, which was mainly due to OEM partner mix and lower contractual OEM subsidy costs compared to the same period in FY2016.

In Q1 FY2017, the Company generated $15,468 in cash from operating activities compared to $17,206 in Q1 FY2016 primarily due to lower operating working capital combined with a decrease in operating income (inclusive of third party advisory costs as a result of the Recapitalization go-private transaction).

The Company generated free cash flow of $13,146 in Q1 FY2017, an improvement of $2,917 or 28.5%, from $10,229 in Q1 FY2016 primarily due to lower capital expenditures related to fewer additions to the dual-band terrestrial repeater network and XM activation fees, partly offset by a decrease in cash flow generated by operating activities.

At November 30, 2016, the Company had total cash of $53,525 compared to $40,379 at August 31, 2016.

Annual General Meeting

As the Company is in the process of finalizing its Recapitalization go-private transaction, it has obtained TSX approval to defer its Annual General Meeting. Additional details regarding the Annual General Meeting such as the meeting date, record date, time and location of the meeting, if required, will be communicated in a subsequent press release.

Conference Call and Webcast Details

SiriusXM Canada will hold a conference call to discuss the Company's Q1 FY2017 results on Thursday, January 12, 2017 at 8:30 a.m. ET. All interested parties can join the call by dialing 647-427-7450 or 1-888-231-8191. Please dial in 15 minutes prior to the call to secure a line. The conference will be archived for replay until Thursday, January 19, 2017 at midnight. To access the archived conference call, please dial 416-849-0833 or 1-855-859-2056 and enter reservation code: 40121558. A live audio webcast of the conference call will be available here: http://bit.ly/2hshZj4. Please connect at least 15 minutes prior to the conference call to ensure adequate time for any software downloads that may be required. An archived replay will be available for 90 days.

Reconciliations




Adjusted EBITDA: Reconciliation

Q1 FY2017

Q1 FY2016

(All amounts in thousands)

Nov 30, 2016

Nov 30, 2015


(unaudited)

(unaudited)


Net income and comprehensive income before income tax

13,739

14,016


Interest expense & income (net)

3,176

3,315


Foreign exchange loss

310

316


Depreciation and amortization

6,040

5,503

EBITDA

23,265

23,150


Stock-based compensation

593

368


Third-party advisory costs

386

Adjusted EBITDA

24,244

23,518




Free Cash Flow: Reconciliation

Q1 FY2017

Q1 FY2016

(All amounts in thousands)

Nov 30, 2016

Nov 30, 2015


(unaudited)

(unaudited)


Cash flow provided by operating activities

15,468

17,206


Purchase of property and equipment

(394)

(1,425)


Purchase of intangible assets

(1,928)

(5,552)

Free Cash Flow

13,146

10,229

 

For a complete definition of non-GAAP measures, and for additional details on the Company's Q1 FY2017 results, please see the Company's MD&A filed January 11, 2017 which is incorporated herein by reference. The non-GAAP measures used in this press release should be used in addition to, but not as a substitute for, the analysis provided in the interim condensed consolidated financial statements for Q1 FY2017.

Forward-Looking Statements

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, including with respect to the Company's Recapitalization go-private transaction, and the timing thereof, and future performance. Although SiriusXM Canada 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, and as a consequence, actual events, performance or results may not be consistent with such forward-looking statements. SiriusXM Canada's forward-looking statements are expressly qualified in their entirety by this cautionary statement. SiriusXM Canada 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 Sirius XM Canada Holdings Inc.'s filings with the Canadian securities regulators, available at www.sedar.com.

About SiriusXM Canada

Sirius XM Canada Holdings Inc. (TSX: XSR) operates as SiriusXM Canada. SiriusXM Canada, with approximately 2.8 million subscribers, is the country's leading audio entertainment company and broadcasts more than 130 satellite radio channels featuring premier sports, news, talk, entertainment and commercial-free music. SiriusXM Canada offers an array of content from the most recognized news, entertainment and major sports brands including the NHL, NFL, NBA, MLB, NASCAR, CNN, CBC, FOX, BBC, Howard Stern, Disney, Comedy Central and more.

SiriusXM programming is available on a variety of devices including pre-installed and after-market radios in cars, trucks and boats, smartphones and mobile devices, and consumer electronics products for homes and offices. SiriusXM programming is also available online at www.siriusxm.ca and on Apple and Android-powered mobile devices.

SiriusXM Canada has partnerships with every major automaker and its radio products are available at more than 2,500 retail locations nationwide. To find out more about SiriusXM Canada (TSX: XSR), visit our website at www.siriusxm.ca.

SiriusXM Canada has been designated one of Canada's 50 Best Managed Companies seven years in a row and is currently a Platinum Club Member, in addition to 2013, 2014 and 2015 rankings in PROFIT 500's list of Canada's Fastest Growing Companies.

Join SiriusXM Canada on Facebook at facebook.com/siriusxmcanada, on Twitter at twitter.com/siriusxmcanada and on Youtube at youtube.com/siriusxmcanada.

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

(Unaudited)


At

November 30,

August 31,

(All amounts in thousands)

2016

2016




ASSETS



Current assets



Cash

53,525

40,379

Accounts receivable

9,005

9,217

Prepaid expenses

1,248

1,318

Inventory

2,639

2,339

Total current assets

66,417

53,253

Property and equipment

10,555

10,678

Intangible assets

133,203

135,483

Deferred tax assets

4,586

8,517

Goodwill

96,733

96,733

Total assets

311,494

304,664




LIABILITIES AND SHAREHOLDERS' DEFICIENCY


Current liabilities



Trade and other payables

47,277

45,120

Due to related parties

17,912

16,557

Interest payable

1,153

3,966

Deferred revenue

153,854

156,929

Provisions

1,083

930

Total current liabilities

221,279

223,502

Deferred revenue

8,260

9,086

Other long-term liabilities

9,142

9,537

Due to related parties

1,208

1,208

Long-term debt

196,802

196,644

Total liabilities

436,691

439,977




Shareholders' deficiency



Share capital

180,280

180,280

Contributed surplus

6,251

5,943

Accumulated deficit

(311,728)

(321,536)

Total shareholders' deficiency

(125,197)

(135,313)

Total liabilities and shareholders' deficiency

311,494

304,664

 

 

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' DEFICIENCY

(Unaudited)










Total

For the three months ended

Share

Contributed

Accumulated

Shareholders'

(All amounts in thousands)

Capital

Surplus

Deficit

Deficiency






At September 1, 2015

178,479

8,817

(330,742)

(143,446)

Net income and comprehensive income

10,075

10,075

Stock-based compensation

78

78

Dividends

(13,504)

(13,504)

Restricted Stock Units ("RSU") and
Performance Stock Units ("PSU") awards,
net equity settlement

1,286

(1,681)

(395)

Stock options exercised

57

(23)

34

At November 30, 2015

179,822

7,191

(334,171)

(147,158)






At September 1, 2016

180,280

5,943

(321,536)

(135,313)

Net income and comprehensive income

9,808

9,808

Stock-based compensation

308

308

At November 30, 2016

180,280

6,251

(311,728)

(125,197)

 

 

INTERIM CONDENSED CONSOLIDATED

STATEMENTS OF INCOME

(Unaudited)







Three months ended



November 30,

November 30,

(All amounts in thousands except per share amounts)


2016

2015





Revenue


87,216

83,517





Operating expenses





Operating costs


63,951

60,367


Depreciation and amortization


6,040

5,503

Operating income


17,225

17,647






Interest income


96

60


Interest expense


(3,272)

(3,375)


Foreign exchange loss


(310)

(316)

Finance costs, net


(3,486)

(3,631)





Net income and comprehensive income before income tax


13,739

14,016

Income tax expense


(3,931)

(3,941)

Net income and comprehensive income


9,808

10,075





Earnings per share - basic and diluted


0.08

0.08

 

 

INTERIM CONDENSED CONSOLIDATED

STATEMENTS OF CASH FLOWS

(Unaudited)




Three months ended




November 30,

November 30,

(All amounts in thousands)



2016

2015






Cash provided by (used in)










OPERATING ACTIVITIES





Net income for the period



9,808

10,075

Add (deduct) items not involving cash:






Amortization of intangible assets



5,649

5,070


Depreciation of property and equipment



391

433


Income tax expense



3,931

3,941


Stock-based compensation



593

368


Accrued interest



(2,813)

(2,813)


Interest accretion



158

146


Foreign exchange loss



314

193

Net change in non-cash working capital and deferred revenue related to operations



(2,563)

(207)

Cash provided by operating activities



15,468

17,206





INVESTING ACTIVITIES





Purchase of property and equipment



(394)

(1,425)

Purchase of intangible assets



(1,928)

(5,552)

Cash used in investing activities



(2,322)

(6,977)






FINANCING ACTIVITIES





Proceeds from exercise of stock options



34

Cash provided by financing activities



34






Net increase in cash during the period



13,146

10,263

Cash balance, beginning of period


40,379

26,128

Cash balance, end of period



53,525

36,391

 

SOURCE Sirius XM Canada Holdings Inc.

For further information: Odeta Kellici, SiriusXM Canada, 416-513-7416, Odeta.Kellici@siriusxm.ca; Craig MacPhail, NATIONAL Equicom, 416-586-1938, Cmacphail@national.ca


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