Astral kicks off Fiscal 2011 with a solid first quarter performance

  • 7% increase in revenues and 5% increase in EBITDA1, 2
  • 11% increase in net earnings2, 4 and 9% increase in basic EPS2, 4

MONTREAL, Jan. 13 /CNW Telbec/ - Astral Media Inc. (TSX: ACM.A/ACM.B) today reported solid financial results for the quarter ended November 30, 2010, which saw continued growth in revenues, EBITDA1, 2, net earnings2, 4, EPS2, 4, and cash flow from operations3.

Consolidated revenues totalled $267.1 million for the first quarter, an increase of 7% over the $250.7 million recorded last year for the same period. EBITDA1, 2 for the first three months increased by 5% to $89.3 million from $85.3 million2 for the same quarter last year. Consolidated net earnings for the first three months of Fiscal 2011 increased by 11% over last year, rising to $53.3 million ($0.94 per share) from $48.2 million2, 4 ($0.86 per share2, 4) last year. Cash flow from operations3 rose by 12% to $67.0 million for the first quarter compared to $59.9 million for the same period last year.

"Towards the end of Fiscal 2010, we saw encouraging signs of recovery in the Canadian advertising markets. Clearly, that momentum carried through to our first quarter and allowed us to record another solid quarter of growth. All of our business units benefited from this momentum, with our Television and Out-of-Home divisions leading the way," said Ian Greenberg, President and Chief Executive Officer.

SEGMENTED FINANCIAL AND OPERATIONAL HIGHLIGHTS

Television

  • Revenue growth of 6%;
  • Advertising and subscriber-related revenue increases of 16% and 3% respectively;
  • Pay-television subscriber growth of 5% (The Movie Network and Super Écran);
  • EBITDA1 growth of 8%2;
  • The launch of a second high-definition channel on the French-language Super Écran network on October 1st;
  • The introduction of Super Écran programming to Vidéotron's illico on DemandTM service;
  • Subsequent to the end of the first quarter of Fiscal 2011, the launch of The Movie Network, HBO Canada, Family Channel and Playhouse Disney programming on Vidéotron's illico on DemandTM service.

Radio

  • Revenue growth of 3%;
  • EBITDA1 decline of 5%2 mainly due to Copyright Board tariff increases introduced in the fourth quarter of Fiscal 2010;
  • Full deployment of Astral Radio's new Emmis Interactive web platform in all of its radio stations across Canada;
  • An agreement with UBC Media Group to launch, towards the end of the second quarter, world-class mobile streaming applications to extend the radio listener experience into the handheld space.

Out-of-Home

  • Revenue growth of 27% to which the Digital Network and the Toronto Street Furniture program contributed significantly;
  • EBITDA1 growth of 31%;
  • The addition of nine new digital outdoor advertising faces in the Toronto market, increasing the national Digital Network to a total of 32 faces. The new digital faces will be operational by the end of January;
  • Partnerships with provincial law enforcement agencies to extend AMBER Alert announcements to Astral's 32 digital faces in Montréal, Toronto and Vancouver.

Corporate

Subsequent to quarter end, the Company announced on December 9, 2010:

  • The appointment of Jacques Parisien to the new position of Executive Vice-President and Chief Operating Officer of the Company;
  • The announcement of a 50% increase in the annual dividend - to $0.75 a share - on all Class A and Class B shares;
  • The renewal of the Company's Normal Course Issuer Bid to repurchase up to 5% of outstanding Class A Shares and Class B Shares.

The unaudited interim consolidated financial statements and related notes and Management's Discussion and Analysis are available on the Company's website: astral.com.

There will be a conference call with analysts and media at 10:30 a.m. on Thursday, January 13, 2011. To access the conference call dial 1-800-731-5319. The conference call will also be broadcast live and archived for a three-month period on the Astral website at astral.com.

Astral is one of Canada's largest media companies. It operates several of the country's most popular pay and specialty television, radio, out-of-home advertising and digital media properties. Astral plays a central role in community life across the country by offering diverse, rich and vibrant programming that meets the tastes and needs of consumers and advertisers. To learn more about Astral, visit astral.com.

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. We disclaim any intention or obligation to update or revise any forward-looking statements.

  1. EBITDA is defined as earnings before interest, taxes, depreciation and amortization. See Appendix 1.
  2. Excluding the $11.6 million of Part II licence fees accrual reversal recorded in the first quarter of Fiscal 2010 ($8.0 million net of income taxes or $0.14 per share, $3.2 million in Television and $8.4 million in Radio). See details in the Management's Discussion and Analysis.
  3. See Appendix 1.
  4. Excluding the impact of an $8.4 million ($0.15 per share) non-cash future income tax recovery recorded in the first quarter of Fiscal 2010 resulting from future income tax rate changes enacted by the Ontario Government. See Appendix 1 and details in the Management's Discussion and Analysis.

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
      2010         2009
             
Revenues   $ 267,093   $ 250,685
             
Operating expenses     177,746     153,872
             
EBITDA (1)     89,347     96,813
             
  Depreciation     6,817     6,140
  Amortization of intangible and non-current assets     2,213     1,444
  Interest expense, net     5,630     7,189
             
Earnings before income taxes     74,687     82,040
             
Income tax provision before undernoted     21,380     25,796
Future income tax recovery resulting from income tax rate changes        -     (8,397)
      21,380     17,399
             
Net earnings   $ 53,307   $ 64,641
             
Earnings per share            
  - Basic   $ 0.94   $ 1.15
  - Diluted   $ 0.93   $ 1.14

 
(1) 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
      2010        2009
             
Cash and cash equivalents provided by (used for):            
             
OPERATING ACTIVITIES            
  Net earnings   $ 53,307   $ 64,641
             
  Non-cash charges (credits):            
    Part II licence fees accrual reversal     -     (11,552)
    Stock-based compensation costs     2,308     2,420
    Depreciation and amortization     9,030     7,584
    Imputed interest on other non-current liabilities     454     559
    Amortization of deferred financing costs     171     171
    Future income tax expense net before undernoted     1,733     4,458
    Future income tax recovery resulting from income tax rate changes         -     (8,397)
             
Cash flow from operations (1)     67,003     59,884
             
Net change in non-cash operating items     (30,813)     (32,811)
             
Cash provided by operating activities     36,190     27,073
             
INVESTING ACTIVITIES            
  Additions to property, plant and equipment     (9,994)     (9,044)
  Additions to other intangible and non-current assets     (2,788)     (1,531)
Cash used for investing activities     (12,782)     (10,575)
             
FINANCING ACTIVITIES            
  Repayment of long-term debt     (10,000)     (10,000)
  Stock options exercised     4,816     840
Cash used for financing activities     (5,184)     (9,160)
             
Net change in cash     18,224     7,338
Cash - beginning of period     11,545     23,100
Cash - end of period   $ 29,769   $ 30,438

 
(1) See Appendix 1.      

ASTRAL MEDIA INC. 
Interim Consolidated Balance Sheets as at
(in thousands of Canadian dollars)
(unaudited)

 
 
    November 30,   August 31,
      2010         2010
             
ASSETS            
             
Current            
  Cash   $ 29,769   $ 11,545
  Accounts receivable     195,522     169,240
  Program and film rights     110,215     106,084
  Prepaid expenses and other current assets     37,711     29,451
      373,217     316,320
             
Program and film rights     75,149     65,923
Property, plant and equipment     181,293     179,938
Broadcast licences     1,413,059     1,413,059
Goodwill     356,945     356,945
Other intangible and non-current assets        79,236     79,362
Future income tax assets     61,669     66,005
             
    $ 2,540,568   $ 2,477,552
             
             
LIABILITIES            
             
Current            
  Accounts payable and accrued liabilities   $ 138,611   $ 138,119
  Income taxes payable     14,201     16,654
  Program and film rights payable     83,501     64,908
  Future income tax liabilities     3,413     5,329
      239,726     225,010
             
Long-term debt     578,618     588,447
Future income tax liabilities     240,564     240,382
Program and film rights payable     13,224     12,668
Other non-current liabilities     61,110     62,302
Derivative financial instruments     6,522     9,699
      1,139,764     1,138,508
SHAREHOLDERS' EQUITY            
             
Capital stock     779,453     768,762
Contributed surplus     12,658     17,200
Retained earnings     613,422     560,119
Accumulated other comprehensive loss     (4,729)     (7,037)
      608,693     553,082
      1,400,804     1,339,044
             
    $ 2,540,568   $ 2,477,552

ASTRAL MEDIA INC.
Business Segments
for the three months ended November 30,
(in thousands of Canadian dollars)
(unaudited)

 
 
      2010         2009
             
REVENUES            
             
Television   $ 149,684   $ 141,227
Radio     91,631     89,165
Out-of-Home     25,778     20,293
             
    $ 267,093   $ 250,685
             
EBITDA(1)            
             
Television   $ 57,583   $ 53,454
Radio     29,556     31,138
Out-of-Home     10,212     7,779
Corporate     (8,004)     (7,110)
             
      89,347     85,261
Part II licence fees accrual reversal (2)           -     11,552
             
    $ 89,347   $ 96,813

               
(1) See Appendix 1.
(2) See "Part II Licence Fees Accrual Reversal" section in the Management's Discussion and Analysis.

ASTRAL MEDIA INC.
Appendix 1
Supplementary Measures
for the three-month periods ended November 30, 2010 and 2009                
(unaudited)



In addition to disclosing 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, 2010 and 2009 to EBITDA:

    November 30
(in thousands of $)          2010       2009
         
Earnings before income taxes   74,687   82,040
Depreciation and amortization       9,030   7,584
Interest expense, net   5,630   7,189
EBITDA   89,347   96,813

Net earnings, basic and diluted earnings per share before Part II licence fees accrual reversal and future income tax recovery. 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 and some regulatory items 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, 2010 and 2009 to net earnings, basic and diluted earnings per share, before the Part II licence fees accrual reversal and future income tax recovery.

      November 30
(in thousands of $)               2010          2009
           
Net earnings     53,307   64,641
Part II licence fees accrual reversal, net of income taxes     -   (8,010)
Future income tax recovery resulting from income tax rate changes     -   (8,397)
Net earnings before Part II licence fees accrual reversal and future income tax recoveries         53,307   48,234
           
           

    November 30
(in dollars)        2010      2009
         
Basic earnings per share   0.94   1.15
Part II licence fees accrual reversal, net of income taxes   -   (0.14)
Future income tax recovery resulting from income tax rate changes   -   (0.15)
Basic earnings per share before Part II licence fees accrual reversal and future income tax recovery    0.94   0.86
         
         

    November 30
(in dollars)       2010      2009
         
Diluted earnings per share   0.93   1.14
Part II licence fees accrual reversal, net of income taxes   -   (0.14)
Future income tax recovery resulting from income tax rate changes   -   (0.15)
Diluted earnings per share before Part II licence fees accrual reversal and future income tax recovery   0.93   0.85
         

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, 2010 and 2009 to cash flow from operations:

    November 30
(in thousands of $)           2010            2009
             
Cash flow from operating activities   36,190   27,073
Net change in non-cash operating items       30,813   32,811
Cash flow from operations   67,003   59,884

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.

SOURCE ASTRAL MEDIA INC.

For further information:

Media: 



Hugues Mousseau   
Manager, Corporate Communications       
Astral Media Inc.      
514-939-5000      
Analysts : 



Claude Gagnon
Senior Vice-President and
Chief Financial Officer
Astral Media Inc.
514-939-5000

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ASTRAL MEDIA INC.

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