Astral Media starts fiscal 2010 with robust first quarter results
- 3% revenue growth and 28% increase in EBITDA(1, 3, 4)
- 42% increase in net earnings(2, 3, 4) and 41% increase in EPS (basic)
(2, 3, 4)(22% and 21% respectively, excluding the reversal of Part II
fees in Fiscal 2010)(2, 4)
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<p/>
<p><location>MONTREAL</location>, <chron>Jan. 14</chron> /CNW Telbec/ - Astral Media Inc. (TSX: ACM.A/ACM.B) today reported robust financial results for the quarter ended <chron>November 30, 2009</chron>, which saw continued growth in revenues, EBITDA(1), net earnings, EPS, and cash flow from operations(4, 5).</p>
<p>Consolidated revenues totalled <money>$250.7 million</money> for the first quarter, an increase of 3% over the <money>$244.5 million</money> recorded last year for the same period. EBITDA(1, 3) for the first three months increased by 28% to <money>$96.8 million</money>(3) from <money>$75.5 million</money>(4) for the same quarter last year. Consolidated net earnings(2) for the first three months of Fiscal 2010 increased by 42% over last year, rising to <money>$56.2 million</money>(2, 3) (<money>$1.00</money> per share) from <money>$39.6 million</money>(4) (<money>$0.71</money> per share) last year. Cash flow from operations(5) rose by 18% to <money>$59.6 million</money> for the first quarter compared to <money>$50.7 million</money>(4) for the same period last year.</p>
<p>"Our relentless focus on execution and on offering our consumers and advertisers the best media products in pay and specialty television, radio and outdoor advertising contributed to an impressive start to this new fiscal year," said <person>Ian Greenberg</person>, President and Chief Executive Officer. "Despite the economic challenges the industry has faced this past year, our sustained investments in branding, programming and sales initiatives have started to yield tangible benefits and have helped to further strengthen the customer experience across our brands and platforms. Other initiatives, such as the launch of online programming with Bell TV, new HD channels, the deployment of Canada's first national digital outdoor advertising network as well as the return of "Les Grandes Gueules" on the NRJ network this month, should have a positive impact on our results in Fiscal 2010."</p>
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OPERATIONAL HIGHLIGHTS
Television
- Revenue growth of 6%;
- EBITDA(1) growth of 29%(3, 4);
- Advertising revenues up 1% and subscriber-related revenues increase of
8%;
- Launch of The Movie Network OnLine, Family OnLine and Playhouse Disney
OnLine services with Bell TV;
- Launch of two new HD channels, MExcess HD and MFun! HD, offered free-
of-charge since December 2, 2009 to subscribers of The Movie Network.
Radio
- Revenue decrease of 1%;
- EBITDA(1) growth of 29%(3, 4);
- Announcement of the return of "Les Grandes Gueules" on NRJ, Canada's
most popular radio show for several years;
- Rebranding of EZ Rock 97.3 FM in Toronto to boom 97.3 in December, with
a new format and a revised personality lineup.
Outdoor Advertising
- Revenue decrease of 4%;
- EBITDA(1) stable;
- Deployment of a national Digital outdoor advertising network with the
addition of nine new faces in Vancouver and two new faces in Toronto.
Corporate
- In October, the Canadian Association of Broadcasters announced a
settlement agreement with the Government of Canada pertaining to the
regulation of Part II licence fees. Consequently, the Company reversed
accrued expenses of $11.6 million in the first quarter of Fiscal 2010;
- Renewal of the normal course issuer bid to repurchase up to 2.5% of
outstanding Class A Shares and Class B Shares announced on December 9,
2009;
- Declaration of a semi-annual dividend of twenty-five cents (25 cents)
per share.
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<p>The unaudited interim consolidated financial statements and related notes and Management's Discussion and Analysis are available on the Company's website: <a href="http://www.astralmedia.com">www.astralmedia.com</a>.</p>
<p>There will be a conference call with analysts and media at <chron>10:30 a.m.</chron> on <chron>Thursday, January 14, 2010</chron>. To access the conference call dial 1-888-231-8191. The conference call will also be broadcast live and archived for a three-month period on the Astral Media website at <a href="http://www.astralmedia.com">www.astralmedia.com</a>.</p>
<p/>
<p>Astral Media is a leading Canadian media company, active in specialty and pay television, radio, outdoor advertising and interactive media. Astral Media's solid and dynamic presence in the country's major markets rests on its commitment to offer a unique combination of high-quality, targeted media for all its audiences.</p>
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<p>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. Except as required under applicable securities regulations, we disclaim any intention or obligation to update or revise any forward-looking statements.</p>
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<pre>
1. EBITDA is defined as earnings before interest, taxes, depreciation and
amortization. See Appendix 1.
2. Excluding the impact of an $8.4 million ($0.15 per share) non-cash
future income tax recovery resulting from future income tax rate
changes enacted by the Ontario Government. See Appendix 1.
3. Including the $11.6 million in Part II licence fees accrual reversal
($8.0 million net of income taxes or $0.14 per share) in the first
quarter of Fiscal 2010 ($3.2 million in Television and $8.4 million in
Radio). See details in the Management's Discussion and Analysis.
4. After the restatement of Fiscal 2009 figures following the adoption of
Section 3064 of the Canadian Institute of Chartered Accountants'
("CICA") Handbook. See details in the Management's Discussion and
Analysis.
5. See Appendix 1.
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
--------------------------
2009 2008
--------------------------
(Restated)(1)
Revenues $ 250,685 $ 244,483
Operating expenses 153,872 169,028
--------------------------
EBITDA(2) 96,813 75,455
Depreciation 6,140 5,294
Amortization of intangible assets 1,444 1,102
Interest expense, net 7,189 10,518
--------------------------
Earnings before income taxes 82,040 58,541
--------------------------
Income tax provision before undernoted 25,796 18,936
Future income tax recovery resulting from
income tax rate changes (8,397) -
--------------------------
17,399 18,936
--------------------------
Net earnings $ 64,641 $ 39,605
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Earnings per share
- Basic $ 1.15 $ 0.71
- Diluted $ 1.14 $ 0.70
-------------------------------------------------------------------------
-------------------------------------------------------------------------
-------------------
(1) Following the adoption of Canadian Institute of Chartered
Accountants' ("CICA") Handbook Section 3064, the Company has restated
results of operations for the three-month period ended November 30,
2008 (see Note 1.b) of the unaudited interim consolidated financial
statements).
(2) 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
--------------------------
2009 2008
--------------------------
(Restated)(1)
Cash and cash equivalents provided by (used for):
OPERATING ACTIVITIES
Net earnings $ 64,641 $ 39,605
Non-cash charges (credits):
Part II licence fees accrual reversal (11,552) -
Stock-based compensation costs 2,143 1,711
Depreciation and amortization 7,584 6,396
Imputed interest on other non-current
liabilities 559 659
Amortization of deferred financing costs 171 172
Future income tax expense before undernoted 4,458 2,179
Future income tax recovery resulting from
income tax rate changes (8,397) -
--------------------------
Cash flow from operations(2) 59,607 50,722
Net change in non-cash operating items (32,534) (16,234)
--------------------------
Cash flow from operating activities 27,073 34,488
--------------------------
INVESTING ACTIVITIES
Short-term investments - cashed - 9,962
Additions to property, plant and equipment (9,044) (10,206)
Additions to other intangible and non-current
assets (1,531) (704)
Business acquisition, net of cash acquired - (2,787)
--------------------------
(10,575) (3,735)
--------------------------
FINANCING ACTIVITIES
Repayment of long-term debt (10,000) (10,000)
Stock options exercised 840 80
--------------------------
(9,160) (9,920)
--------------------------
Net change in cash and cash equivalents 7,338 20,833
Cash and cash equivalents (bank overdraft)
- beginning of period 23,100 (3,644)
Cash and cash equivalents - end of period $ 30,438 $ 17,189
-------------------------------------------------------------------------
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(1) Following the adoption of CICA Handbook Section 3064, the Company has
restated results of operations for the three-month period ended
November 30, 2008 (see Note 1.b) of the unaudited interim
consolidated financial statements).
(2) See Appendix 1.
ASTRAL MEDIA INC.
Interim Consolidated Balance Sheets as at
(in thousands of Canadian dollars)
(unaudited)
-------------------------------------------------------------------------
November 30, August 31,
--------------------------
2009 2009
--------------------------
(Restated)(1)
ASSETS
Current
Cash and cash equivalents $ 30,438 $ 23,100
Accounts receivable 165,070 143,803
Program and film rights 99,026 92,545
Prepaid expenses and other current assets 29,026 27,904
--------------------------
323,560 287,352
Program and film rights 65,088 61,219
Property, plant and equipment 153,533 151,637
Broadcast licences 1,408,037 1,408,037
Goodwill 356,945 356,945
Other intangible and non-current assets 50,594 50,894
Future income tax assets 71,295 79,522
--------------------------
$ 2,429,052 $ 2,395,606
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LIABILITIES
Current
Accounts payable and accrued liabilities $ 114,857 $ 138,771
Income taxes payable 15,326 12,191
Program and film rights payable 66,573 58,220
Future income tax liabilities 4,318 4,481
--------------------------
201,074 213,663
Long-term debt 682,932 692,761
Future income tax liabilities 232,124 243,353
Other non-current liabilities 65,514 65,267
Derivative financial instruments 20,032 22,377
--------------------------
1,201,676 1,237,421
--------------------------
SHAREHOLDERS' EQUITY
Capital stock 757,255 753,028
--------------------------
Contributed surplus 15,824 17,068
--------------------------
Retained earnings 468,835 404,198
Accumulated other comprehensive loss (14,538) (16,109)
--------------------------
454,297 388,089
--------------------------
1,227,376 1,158,185
--------------------------
$ 2,429,052 $ 2,395,606
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(1) Following the adoption of CICA Handbook Section 3064, the Company has
restated its consolidated balance sheet as at August 31, 2009 (see
Note 1.b) of the unaudited interim consolidated financial
statements).
ASTRAL MEDIA INC.
Business Segments
for the three months ended November 30,
(in thousands of Canadian dollars)
(unaudited)
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2009 2008
--------------------------
(Restated)(1)
REVENUES
Television $ 141,227 $ 133,439
Radio 89,165 89,858
Outdoor Advertising 20,293 21,186
--------------------------
$ 250,685 $ 244,483
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EBITDA(2)
Television $ 56,608 $ 43,908
Radio 39,536 30,656
Outdoor Advertising 7,779 7,816
Corporate (7,110) (6,925)
--------------------------
$ 96,813 $ 75,455
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-----------------------------
(1) Following the adoption of CICA Handbook Section 3064, the Company has
restated results of operations for the three-month period ended
November 30, 2008 (see Note 1.b) of the unaudited interim
consolidated financial statements).
(2) See Appendix 1.
ASTRAL MEDIA INC.
Appendix 1
Supplementary Measures
for the three-month periods ended
(unaudited)
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In addition to discussing 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,
2009 and 2008 to EBITDA:
November 30
--------------------------
(in thousands of $) 2009 2008
-------------------------------------------------------------------------
-------------------------------------------------------------------------
(Restated)(1)
Earnings before income taxes 82,040 58,541
Depreciation and amortization 7,584 6,396
Interest expense, net 7,189 10,518
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EBITDA 96,813 75,455
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Net earnings and basic earnings per share before the impact of future
income tax rate changes. 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 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,
2009 and 2008 to net earnings and basic earnings per share, before the impact
of future income tax rate changes.
November 30
--------------------------
(in thousands of $) 2009 2008
-------------------------------------------------------------------------
-------------------------------------------------------------------------
(Restated)(1)
Net earnings 64,641 39,605
Future income tax recovery resulting from future
income tax rate changes (8,397) -
-------------------------------------------------------------------------
Net earnings before the impact of future income
tax rate changes 56,244 39,605
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November 30
--------------------------
(in thousands of $) 2009 2008
-------------------------------------------------------------------------
-------------------------------------------------------------------------
(Restated)(1)
Basic earnings per share 1.15 0.71
Impact of future income tax rate changes (0.15) -
Basic earnings per share, before the impact of
-------------------------------------------------------------------------
future income tax rate changes 1.00 0.71
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(1) Following the adoption of CICA Handbook Section 3064, the Company has
restated results of operations for the three-month period ended
November 30, 2008 (see Note 1.b) of the unaudited interim
consolidated financial statements).
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, 2009 and 2008 to cash flow from operations:
November 30
--------------------------
(in thousands of $) 2009 2008
-------------------------------------------------------------------------
-------------------------------------------------------------------------
(Restated)(1)
Cash flow from operating activities 27,073 34,488
Net change in non-cash operating items 32,534 16,234
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Cash flow from operations 59,607 50,722
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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.
(1) Following the adoption of CICA Handbook Section 3064, the Company has
restated results of operations for the three-month period ended
November 30, 2008 (see Note 1.b) of the unaudited interim
consolidated financial statements).
For further information: Medias: Alain Bergeron, Vice-President, Corporate communications and Chief Marketing Officer, Astral Media Inc., (514) 939-5000; Financial Analysts: Claude Gagnon, Senior Vice-President and Chief Financial Officer, Astral Media Inc., (514) 939-5000
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