SiriusXM Canada Reports Record Adjusted EBITDA For First Quarter Fiscal 2016

- Company's growth continues with top- and bottom-line improvements and record self-pay subscribers -

TORONTO, Jan. 13, 2016 /CNW/ - Sirius XM Canada Holdings Inc. ("SiriusXM Canada" or the "Company") (TSX: XSR), parent of Sirius XM Canada Inc., today released unaudited financial results for its fiscal 2016 first quarter ("Q1 FY2016") ended November 30, 2015 prepared in accordance with International Financial Reporting Standards (IFRS). A summary of IFRS financial results for Q1 FY2016 is attached.  All results are reported in Canadian dollars unless otherwise stated.

Q1 FY2016 Financial and Operating Metrics

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






Financial 1


Q1 2016

Q1 2015

% Change4



Nov 30, 2015

Nov 30, 2014




(Unaudited)

(Unaudited)







Revenue


83,517

78,985

5.7%

Adjusted EBITDA 2


23,518

22,906

2.7%

Net income and comprehensive income


10,075

8,024

25.6%

Free cash flow


10,229

13,679

-25.2%






Operating 1





Self-Paying Subscribers


1,939

1,847

5.0%

Total Subscribers


2,713

2,603

4.2%

Self-Pay ARPU 3


$12.57

$12.38

1.5%

Subscriber Acquisition Cost (SAC)


$40

$39

2.6%

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

2 Adjusted EBITDA is a non-GAAP measure. A reconciliation of income (loss) before taxes to both EBITDA and Adjusted EBITDA is provided below.

3Self-Pay ARPU is derived from the total of earned subscription revenue from Self-Pay subscribers, the music royalty and regulatory fee and activation fees, divided by the monthly weighted average number of Self-Paying subscribers. Please see the Company's MD&A for a more detailed description.

4Percentage variances/changes are calculated based on the exact numbers, therefore, amounts may not sum as a result of rounding in certain instances.

"With revenue growth, record Adjusted EBITDA and self-pay subscribers at an all-time high, fiscal 2016 is off to a strong start," said Mark Redmond, President and CEO, SiriusXM Canada. "We added close to 14,000 net self-pay subscribers in the quarter as we continue to drive net self-pay annual subscriber growth. We also delivered year-over-year improvements in self-pay ARPU and impressive self-pay churn of 1.93%. At more than 2.7 million total subscribers, we are one of the largest media subscription businesses in Canada. We continue to bring unmatched content to people across the country, as recently highlighted by Howard Stern's contract renewal. Our addressable market, combined with our strong OEM relationships, continue to grow and we look forward to further penetrating both the new and used vehicle segments. We remain intensely focused on further enhancing our subscribers' listening experience to continue delivering strong subscriber, revenue, Adjusted EBITDA and cash flow growth."

"We delivered strong revenue and Adjusted EBITDA growth in the quarter," said Jason Redman, Chief Financial Officer. "Adjusted EBITDA margins remain strong despite a one-time 16% increase in copyright fees. They also improved sequentially, primarily due to the seasonality of our CCD payments, the majority of which we recognize in Q4. We will continue to work towards further strengthening our financial results through the remainder of fiscal 2016 by optimizing the balance between expanding our subscriber base and improving self-pay ARPU, while also carefully managing investments in the business to support our long-term growth."

Q1 FY2016 Results Financial Review

For Q1 FY2016, revenue was $83.5 million, up $4.5 million, or 5.7%, from $79.0 million in Q1 FY2015. The year-over-year improvement reflects growth in the Company's self-paying subscriber base and an increase in Self-Pay ARPU. Q1 FY2016 Self-Pay ARPU was $12.57, up 1.5% from $12.38 in Q1 FY2015 driven by the Company's implementation of its increased Music Royalty and Regulatory Fee (MRF) on renewing subscribers. 

Adjusted EBITDA for Q1 FY2016, increased $0.6 million, or 2.7%, to $23.5 million from $22.9 million in Q1 FY2015. The year-over-year increase was a result of revenue growth partly offset by an increase in the Company's copyright fees and higher royalties related to increased revenues.

The Company recorded net income of $10.1 million in Q1 FY2016, up $2.1 million, or 25.6%, compared to net income of $8.0 million in Q1 FY2015 as a result of better operational performance and lower depreciation and amortization charges.

SAC for Q1 FY2016 was $40, up from $39 in Q1 FY2015 as a result of, among other things, increased purchases in the Aftermarket segment and higher exchange rates, partly offset by lower average OEM subsidies.

In Q1 FY2016, the Company generated $17.2 million in cash from operating activities, marginally lower by $0.1 million, or 0.8%, from $17.3 million in cash from operating activities in Q1 FY2015. The Company generated free cash flow of $10.2 million in Q1 FY2016, lower by $3.5 million, or 25.2%, from $13.7 million in Q1 FY2015 as a result of a $3.3 million increase in capital expenditures related to our dual-band repeater network and other intangibles.

As at November 30, 2015, the Company had total cash and cash equivalents of $36.4 million compared to $26.1 million as at August 31, 2015. The increase is primarily due to cash flow from operating activities of $17.2 million in Q1 FY2016 offset by capital expenditures of $7.0 million.

Conference Call and Webcast Details

SiriusXM Canada will hold a conference call to discuss the Company's Q1 FY2016 results on Thursday, January 14, 2016 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 21, 2016 at midnight. To access the archived conference call, please dial 416-849-0833 or 1-855-859-2056 and enter reservation code: 4790167. A live audio webcast of the conference call will be available here: http://bit.ly/1OGvNvZ. 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

The following is a reconciliation of EBITDA and Adjusted EBITDA to Income (loss) before income taxes.






Adjusted EBITDA: Reconciliation


Q1 2016


Q1 2015

In ($ 000's)


Nov 30, 2015


Nov 30, 2014



(Unaudited)


(Unaudited)







Net income and comprehensive income before income tax


14,016


11,565


Interest expense & income, (net)


3,315


3,027


Foreign exchange loss


316


64


Depreciation and amortization


5,503


6,942

EBITDA


23,150


21,598


Stock-based compensation


368


1,306


Fair value adjustments *



3

Adjusted EBITDA


23,518


22,906

* Fair value adjustment relates to a reduction in revenue due to the valuation of deferred revenue as per purchase price accounting.

For complete definition of non-GAAP measures and for more details on the Company's Q1 FY2015 results, please see the Company's Interim Management Discussion & Analysis filed January 13, 2016 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 condensed consolidated financial statements for FY 2016.

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 payment of dividends in the future 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, including with respect to the ability of the Company to pay dividends in the future, the redemption of Sirius XM Canada's 5.625% Senior Unsecured Notes, and the terms, timing and conditions of any refinancing of such notes. 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 more than 2.7 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, visit our website at www.siriusxm.ca.

SiriusXM Canada has been designated one of Canada's 50 Best Managed Companies six years in a row and 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.

CONSOLIDATED INTERIM BALANCE SHEETS

(Unaudited)

At





November 30,


August 31,

(in thousands of Canadian dollars)





2015


2015









ASSETS








Current assets








Cash and cash equivalents





36,391


26,128

Accounts receivable





10,662


9,436

Prepaid expenses





3,291


5,337

Inventory





35


35

Total current assets





50,379


40,936

Long-term prepaid expenses





263


305

Property and equipment





7,286


4,285

Intangible assets





140,922


131,410

Deferred tax assets





15,487


19,428

Goodwill





96,733


96,733

Total assets





311,070


293,097









LIABILITIES AND SHAREHOLDERS' DEFICIENCY








Current liabilities








Trade and other payables





57,733


52,545

Due to related parties





13,028


15,950

Interest payable





1,153


3,966

Deferred revenue





152,981


153,076

Dividends payable





13,504


Provisions





955


983

Total current liabilities





239,354


226,520

Deferred revenue





10,960


12,033

Other long-term liabilities





10,426


651

Due to related parties





1,208


1,208

Long-term debt





196,182


196,036

Provisions





98


95

Total liabilities





458,228


436,543









Shareholders' deficiency








Share capital





179,822


178,479

Contributed surplus





7,191


8,817

Accumulated deficit





(334,171)


(330,742)

Total shareholders' deficiency





(147,158)


(143,446)

Total liabilities and shareholders' deficiency





311,070


293,097

 

CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN SHAREHOLDERS' DEFICIENCY

(Unaudited)


















Total

For the three months ended


Share


Contributed


Accumulated


Shareholders'

(in thousands of Canadian dollars)


Capital


Surplus


Deficit


Deficiency










Balance, September 1, 2014


176,862


6,067


(270,157)


(87,228)

Net income and comprehensive income




8,024


8,024

Stock-based compensation



1,306



1,306

Dividends




(13,448)


(13,448)

Stock options exercised


260


(149)



111

Balance, November 30, 2014


177,122


7,224


(275,581)


(91,235)










Balance, 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)

RSU and PSU awards, net equity settlement


1,286


(1,681)



(395)

Stock options exercised


57


(23)



34

Balance, November 30, 2015


179,822


7,191


(334,171)


(147,158)

 

CONSOLIDATED INTERIM STATEMENTS OF OPERATIONS AND

COMPREHENSIVE INCOME

(Unaudited)



Three months ended



November 30,


November 30,

(in thousands of Canadian dollars, except per share)


2015


2014






Revenue


83,517


78,985






Operating expenses






Operating costs


60,367


57,387


Depreciation and amortization


5,503


6,942

Operating income


17,647


14,656











Finance costs, net






Interest income


60


90


Interest expense


(3,375)


(3,117)


Foreign exchange loss


(316)


(64)

Finance costs, net


(3,631)


(3,091)






Net income and comprehensive income before income tax


14,016


11,565

Income tax expense


(3,941)


(3,541)

Net income and comprehensive income


10,075


8,024






Earnings per share - basic and diluted


0.08


0.06

 

CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS

(Unaudited)








Three months ended



November 30,


November 30,

(in thousands of Canadian dollars)


2015


2014

Cash provided by (used in)










OPERATING ACTIVITIES





Net income for the period


10,075


8,024

Add (deduct) items not involving cash:






Amortization of intangible assets


5,070


6,493


Depreciation of property and equipment


433


449


Income tax expense


3,941


3,541


Stock-based compensation


368


1,306


Accrued interest


(2,813)


(2,813)


Interest accretion


146


140


Foreign exchange loss


193


74

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


(207)


129

Cash provided by operating activities


17,206


17,343






INVESTING ACTIVITIES





Purchase of property and equipment


(1,425)


(205)

Purchase of intangible assets


(5,552)


(3,459)

Cash used in investing activities


(6,977)


(3,664)






FINANCING ACTIVITIES





Proceeds from exercise of stock options


34


111

Cash provided by financing activities


34


111






Net increase in cash and cash equivalents during the period


10,263


13,790

Cash and cash equivalents, beginning of period

26,128


23,868

Cash and cash equivalents, end of period


36,391


37,658

 

SOURCE Sirius XM Canada Holdings Inc.

For further information: Odeta Kellici, SiriusXM Canada, Tel: 416-513-7416, Odeta.Kellici@siriusxm.ca; Kristen Dickson, NATIONAL Equicom, 416-848-1429, kdickson@national.ca


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890