SiriusXM Canada Reports Strong First Quarter Fiscal 2012 Results

  • Total Subscribers exceed 2.0 Million; Year-Over-Year Net Adds of 217,300

  • Self-Paying Subscribers of more than 1.4 Million; Year-Over-Year Net Self-Pay Adds of 172,000

  • Adjusted EBITDA** of $12.9 Million, up 152.0% on a combined basis

  • Fixed cash operating expense reduced by 19.5% Year-Over-Year, or $3.7 million1

TORONTO, Feb. 10, 2012 /CNW/ - Canadian Satellite Radio Holdings Inc. ("Sirius XM Canada" or the "Company") (TSX: XSR), parent of SiriusXM Canada Inc., today released unaudited financial results for the first quarter fiscal 2012 prepared in accordance with International Financial Reporting Standards (IFRS). A summary of IFRS financial results for Q1 F2012 is attached2. To more accurately reflect the performance of the newly combined entity formed through the merger of Sirius Canada and XM Canada, the Company has also provided unaudited combined financial information (referred to as "Combined Information") for the comparative three-month periods ended November 30, 2010, prepared as if the previously completed combination transaction had occurred on September 1, 2010. All results are reported in Canadian dollars unless otherwise stated.

Q1 FY2012 Compared to Combined Information Highlights

  • Adjusted EBITDA increased 152.0% to $12.9 million from $5.1 million in Q1 FY2011

  • Grew total Subscribers 12.1% to more than 2.0 million from 1.8 million at November 30, 2010

  • Increased Self-Paying Subscribers 13.8% to more than 1.4 million from 1.2 million at November 30, 2010

  • Revenue grew 6.6% to $63.1 million from $59.2 million in Q1 FY2011

  • Fixed cash operating expense of $15.2 million down from $18.9 million in Q1 FY2011, representing year-over-year savings of 19.5%, or $3.7 million

  • Increased cash by $9.2 million in the quarter, recording cash and cash equivalents of $35.2 million at November 30, 2011

"We entered fiscal 2012 a bigger and stronger organization, and that is reflected in our results for our first full quarter as a combined entity," said Mark Redmond, President and CEO, SiriusXM Canada. "We achieved double-digit growth in our subscriber base, recognized significant fixed cash operating expense savings, delivered record Adjusted EBITDA and generated over $9.0 million in cash. We have only started to capitalize on the opportunities available to us as a merged company and are focused on further strengthening our financial results by adding subscribers, maintaining our existing subscribers and driving increased operating efficiency across the organization. Given our unmatched audio content, relationships with every major car manufacturer and proven aftermarket and direct sales channels, we expect our growth momentum to continue. With relatively low capital expenditure requirements going forward, the business is positioned to generate consistent strong free cash flow."

_______________________________________
1 Please see the Company's MD&A for a definition of Fixed cash operating expense
2 For a complete set of financial results including the accompanying notes please refer to the Company's filings on www.sedar.com

Financial and Operational Highlights

Combined Information for Q1 FY2011 assumes the combination of XM Canada and Sirius Canada Inc. occurred as of September 1, 2010. Below, the Company has provided certain non-GAAP measures and industry metrics. These figures are subject to the qualification and assumptions set out in the notes to such results.

Financial *     Q1 FY2012       Q1 FY2011
      (Unaudited)       (Unaudited)
               
Total Revenue     $63,111       $59,225
               
Adjusted EBITDA**     $12,880       $5,111
               
Operating *              
               
Self-Paying Subscribers     1,416       1,244
               
Total Subscribers     2,014       1,797
               
Per Subscriber Acquisition Cost (SAC)     $54       $63
               
Cost Per Gross Addition (CPGA)     $83       $97

* All figures in the table above are in thousands except, SAC and CPGA
** Adjusted EBITDA is a non-GAAP measure. A reconciliation of operating income to both EBITDA and Adjusted EBITDA is provided below.

Financial review of current quarter IFRS results compared to Combined Information
For Q1 FY2012, revenue was $63.1 million, up 6.6% from $59.2 million in Q1 FY2011 primarily as a result of the growth in the Company's revenue-generating subscriber base.

SAC was $54 in Q1 FY2012 down from $63 in Q1 FY2011. The decrease was mainly attributable to lower subsidies and distribution costs in the automotive channel. In addition, a change in sales mix for radios sold through the Company's aftermarket channel had an impact on SAC in the quarter, as the Company sold a higher percentage of radios that have a lower unit SAC in Q1 FY2012 compared to Q1 FY2011.

CPGA was $83 in Q1 FY2012, a decrease from $97 in Q1 FY2011. The year-over-year decline was a result of lower subsidies and distribution costs along with a decrease in marketing costs, achieved through increased operating efficiencies and post-merger cost synergies.

Q1 FY2012 Adjusted EBITDA improved to $12.9 million, representing a 152.0% increase, or $7.8 million improvement, from Adjusted EBITDA of $5.1 million in Q1 FY2011. The year-over-year increase was primarily a result of the Company's top-line growth combined with a $3.3 million decrease in operating expenses driven by increased operating efficiencies and post-merger cost synergies in areas such as general and administrative, and marketing.

As at November 30, 2011, SiriusXM Canada had total cash and cash equivalents of $35.2 million, up from $26.0 million as at August 31, 2011. During the quarter, the Company generated $10.0 million in cash from operations and used $1.0 million in investing activities.

Conference Call and Webcast Details
SiriusXM Canada will hold a conference call to discuss the Company's Q1 FY2012 results on Friday, February 10, 2012 at 8:00 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 call will be archived for replay until Friday, February 17, 2012 at midnight. To access the archived conference call, please dial 416-849-0833, or 1-855-859-2056 and enter the reservation code 47272401. A live audio webcast of the conference call in addition to a slide presentation will be available at http://www.siriusxm.ca and www.newswire.ca. Please connect at least 15 minutes prior to the conference call to ensure adequate time for any software download that may be required to join the webcast.  An archived replay of the webcast will be available for 365 days at www.newswire.ca.

Reconciliations
The following is a reconciliation of unaudited EBITDA and unaudited Adjusted EBITDA to Operating Income (loss).

(In $000's)         IFRS
Q1 FY2012
      Combined
Q1 FY2011
          (Unaudited)       (Unaudited)
                   
Operating income (loss)         281       (4,381)
                   
Amortization         10,940       6,976
                   
EBITDA         11,221       2,595
                   
Merger and restructuring costs         918       2,476
                   
Stock based compensation         394       40
                   
Fair value adjustments*         347        
                   
Adjusted EBITDA         12,880       5,111

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

Please see the Company's Management Discussion & Analysis filed February 9, 2012 for a more detailed explanation of the differences between GAAP actual financial results and the combined information described in this press release. 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 consolidated statement of operations and comprehensive income. Please see the Company's Management Discussion & Analysis filed February 9, 2012 for complete definition of non-GAAP measures.

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 future operating performance and merger benefits and costs synergies. 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. 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 Canadian Satellite Radio Holdings Inc.'s filings with the Canadian securities regulators, available at www.sedar.com.

About SiriusXM Canada
Canadian Satellite Radio Holdings Inc. (TSX: XSR) operates as SiriusXM Canada. SiriusXM Canada is the country's leading audio entertainment company and broadcasts more than 120 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 and entertainment brands as well as from professional sports leagues including the NHL, NFL, MLB and CFL.

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.sirius.ca and www.xmradio.ca and on Apple, BlackBerry and Android-powered mobile devices.

SiriusXM Canada has partnerships with every major automaker and its radio products are available at more than 3,000 retail locations nationwide.

Consolidated Interim Financial Statements

Canadian Satellite Radio Holdings Inc.
November 30, 2011

(Unaudited)

 


                       
CONSOLIDATED INTERIM BALANCE SHEET
(Unaudited)
                     
As at  
November 30,       August 31,       December 1,
(Canadian dollars)     2011       2011       2010
                       
ASSETS  

               
Current assets
                   
Cash and cash equivalents     35,182,034       26,015,439       47,610,454
Accounts receivable     11,868,165       10,718,676       8,652,620
Prepaid expenses
  2,088,554       2,587,736       1,918,196
Inventory     1,383,864       2,265,438       1,409,832
Total current assets  
50,522,617       41,587,289       59,591,102
                       
Long-term prepaid expenses  
962,914       901,563       36,720
Property and equipment     9,400,885       9,680,308       2,636,352
Intangible assets
  196,823,931       206,113,620       4,415,866
Deferred tax assets     52,682,937       51,545,684       
Goodwill     96,732,525       96,732,525      
Total assets  
407,125,809       406,560,989       66,680,040
   
                 
LIABILITIES AND SHAREHOLDERS' EQUITY                      
Current liabilities  
                 
Trade and other payables     37,258,302       32,870,628       31,239,110
Due to related parties
  19,522,762       17,203,492       19,836,681
Interest payable     6,326,861       2,709,537      
Current portion of deferred revenue     120,902,325       126,995,705       79,892,903
Provisions
  1,811,338       2,123,557       1,126,980
Total current liabilities     185,821,588       181,902,919       132,095,674
                       
Deferred revenue
  19,765,444       20,084,379       12,710,409
Other long-term liabilities
  8,840,490       9,248,840       200,156
Due to related parties     1,208,332       1,208,332      
Deferred tax liability
              1,133,756
Long-term debt     146,414,405       146,143,284      
Provisions     505,236       497,197      
Total liabilities     362,555,495       359,084,951       146,139,995
   
                 
Shareholders' equity (deficiency)                      
Share capital     147,466,805       147,169,430       36,000,100
Contributed surplus
  4,532,690       4,324,032      
Accumulated deficit     (107,429,181)       (104,017,424)       (115,460,055)
Total shareholders' equity (deficiency)     44,570,314       47,476,038       (79,459,955)
Total liabilities and shareholders' equity     407,125,809       406,560,989       66,680,040



 
CONSOLIDATED INTERIM STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME
(Unaudited)      


November 30,     February 28,
(Canadian dollars)   2011     2011
             
Revenue   63,111,245     42,499,096
             
Operating expenses          
  Operating costs   50,971,927     36,903,670
  Severance and merger costs   918,023     1,030,802
  Depreciation and amortization   10,940,085     952,475
Operating income     281,210     3,612,149
           
Finance costs, net          
Interest income   43,648     117,015
Interest expense   (4,343,312)    
Foreign exchange loss   (502,049)     (152,580)
Loss on revaluation of derivative   (28,507)    
Finance costs   4,830,220     35,565
             
Net income (loss) before income tax   (4,549,010)     3,576,584
Income tax (expense) recovery   1,137,253    
Net income (loss) and comprehensive income loss)   (3,411,757)     3,576,584
             
Basic and fully diluted (loss) earnings per share   (0.03)     0.04

 
CONSOLIDATED INTERIM STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (DEFICIENCY)
(Unaudited)                        
(Canadian dollars)     Share
Capital
    Contributed
Surplus
    Accumulated
deficit
    Total
shareholders'
equity
(deficiency)
                         
Balance, December 1, 2010     36,000,100         (115,460,055)     (79,459,955)
Total comprehensive income for the period             3,576,584     3,576,584
Dividends             (710,137)     (710,137)
Part VI.1 tax             (59,178)     (59,178)
Balance, February 28, 2011     36,000,100         (112,652,786)     (76,652,686)
                         
Balance, September 1, 2011     147,169,430     4,324,032     (104,017,424)     47,476,038
Total comprehensive income (loss) for the period             (3,411,757)     (3,411,757)
Stock-based compensation         393,921         393,921
Stock options exercised     297,375     (185,263)         112,112
Balance, November 30, 2011     147,466,805     4,532,690     (107,429,181)     44,570,314


 
CONSOLIDATED INTERIM STATEMENT OF CASH FLOWS
(Unaudited)            
Three months ended      November 30,      February 28,
(Canadian dollars)     2011     2011
Cash provided by (used in)            
               
OPERATING ACTIVITIES            
Net income (loss) for the period     (3,411,757)     3,576,584
Add(deduct) items not involving cash            
  Amortization of intangible assets     10,151,183     707,442
  Depreciation of property and equipment     788,901     245,033
  Future income tax recovery     (1,137,253)      
  Stock-based compensation     393,921    
  Accrued interest     3,617,324    
  Interest accretion     233,493    
  Revaluation of derivative     28,507    
  Unrealized foreign exchange losses (gains)     103,256    
  Net change in non-cash working capital and deferred revenue
related to operations
    (763,034)     (2,542,734)
Cash provided by operating activities     10,004,541     1,986,325
               
INVESTING ACTIVITIES            
Purchase of property and equipment     (511,301)     (113,769)
Purchase of intangible assets     (438,757)     (674,571)
Cash used in investing activities     (950,058)     (788,340)
               
FINANCING ACTIVITIES            
Proceeds from exercise of stock options     112,112      —
Cash provided by financing activities     112,112      —
               
Net increase in cash and cash equivalents during the period     9,166,595     1,197,985
Cash and cash equivalents, beginning of period     26,015,439     47,610,454
Cash and cash equivalents, end of period     35,182,034     48,808,439

 

 

 

 

SOURCE Canadian Satellite Radio Holdings Inc.

For further information:

Investors 
Morlan Reddock 
416-408-6899 
investor.relations@xmradio.ca

Kristen Dickson
TMX Equicom
416-815-0700 ext 273
kdickson@equicomgroup.com


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