- Company delivers top-line growth and increased profitability fueled by year-over-year expansion of its subscriber base and improvements in Self-Pay ARPU -
TORONTO, Jan. 12, 2015 /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 2015 first quarter ended November 30, 2014 prepared in accordance with International Financial Reporting Standards (IFRS). A summary of IFRS financial results for Q1 FY2015 is attached1. All results are reported in Canadian dollars unless otherwise stated.
Q1 FY2015 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||Q1 FY2015||Q1 FY2014||% Change|
|(November 30, 2014)||(November 30, 2013)|
|Free cash flow||13,678||12,819||6.7%|
|Subscriber Acquisition Cost (SAC)||$39||$43||(7.7%)|
|Cost Per Gross Addition (CPGA)||$64||$69||(7.2%)|
|1Adjusted EBITDA is a non-GAAP measure. A reconciliation of operating income to both EBITDA and Adjusted EBITDA is provided below.|
|2All figures in the table above are in thousands except, ARPU, SAC and CPGA.|
|3Self-Pay ARPU is derived from the total of earned subscription revenue from Self-Pay subscribers and 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.|
"During the quarter, we delivered top-line growth, increased profitability and grew our free cash flow," said Mark Redmond, President and CEO, SiriusXM Canada. "Our results are a testament to the strength of our overall business model and value of our service offering. We generated revenue growth in the face of higher churn related to our increased Music Royalty and Regulatory Fees, much of which was driven by an increase in Self-Pay ARPU. We also realized an increase in Adjusted EBITDA and strong free cash flow despite significantly higher copyright fees and greater capital expenditures.
Mr. Redmond continued: "We firmly believe we are positioned for continued growth in fiscal 2015. We are confident we can deliver year-over-year subscriber growth and increase Self-Pay ARPU. We are also gaining further traction in the pre-owned vehicle market. We realized a five percentage point improvement in total gross additions generated through this channel compared to Q1 fiscal 2014. Furthermore, industry fundamentals remain sound, our OEM penetration rate continues to increase, our investment in exclusive content is unwavering and our soon-to-be-launched new SMS system will significantly enhance our customer experience. Through the combination of our top-line growth opportunities, success in carefully managing costs and excellent operating leverage, we are confident we can deliver profitable growth for many years to come."
1 For a complete set of financial results including the accompanying notes please refer to the Company's filings on www.sedar.com
Developments During the Quarter: Adoption of IFRIC 21
On September 1, 2014, the Company adopted retrospectively IFRIC 21, Levies, which clarifies the timing of accounting for a liability in relation with the outflow of resources that is imposed by governments in accordance with legislation, based on the activities that trigger the payment. The application of IFRIC 21 impacted the timing of when the CCD obligations are accrued. As a result of the accounting policy change for IFRIC 21, the adjustments made to the three months ended November 30, 2013 Condensed Consolidated Interim Financial Statements (Unaudited) are summarized in the table below:
|IFRIC 21 Adjustment||Three months ended November 30, 2013|
|(in $ 000's)||As Reported||IFRIC 21 Adjustment||Restated|
|Net Income before tax||5,073||1,781||6,854|
|Income tax expense||(1,579)||(472)||(2,051)|
|Net Income after tax||3,494||1,309||4,803|
|Earnings per share||0.03||0.01||0.04|
Q1 FY2015 Results Financial Review
For Q1 FY2015, revenue was $79.0 million, up $2.6 million, or 3.3%, from $76.4 million for the same period in 2014. The year-over-year improvement reflects growth in the Company's self-paying subscriber base and an increase in Self-Pay ARPU, which were partially offset by a reduction in promotional revenue due to revised terms related to contract renewals with certain OEM partners. Q1 FY2015 Self-Pay ARPU was $12.38, up 2.5% from $12.08 in Q1 FY2014. The year-over-year improvement in quarterly Self-Pay ARPU was driven by the Company's implementation of its increased Music Royalty and Regulatory Fees (MRF) on renewing subscribers.
Q1 FY2015 Adjusted EBITDA of $22.9 million improved by $1.5 million, or 6.9%, from $21.4 million in Q1 FY2014. The year-over-year increase was a result of revenue growth, which was offset, in part, by a higher cost of revenue due to an increase in the Company's copyright fees.
In Q1 FY2015, the Company generated net income of $8.0 million, up $3.2 million, or 67.0%, from $4.8 million in Q1 FY2014.
SAC for Q1 FY2015 continued to benefit from the revised terms related to contract renewals with certain OEM partners, as well as a greater volume of gross additions from the pre-owned vehicle market where the cost to acquire subscribers is much lower. SAC was $39 in Q1 FY2015, down from $43 in Q1 FY2014.
CPGA was $64 in Q1 FY2015, down from $69 in Q1 FY2014, reflecting lower subsidy costs, and higher gross additions from the pre-owned vehicle channel.
In Q1 FY2015, the Company generated $17.3 million in cash from operating activities, up $1.7 million, or 11.1%, from $15.6 million in cash from operating activities in Q1 FY2014 as a result of year-over-year changes in working capital offset by timing of interest payment on long-term debt.
The Company generated free cash flow of $13.7 million in Q1 FY2015, up $0.9 million, or 6.7%, from $12.8 million in Q1 FY2014.
As at November 30, 2014, SiriusXM Canada had total cash, cash equivalents and short-term investments of $37.7 million compared to $23.9 million as at August 31, 2014. The increase is due primarily to higher operating income and beneficial working capital changes, offset by interest payments on the Company's long-term debt.
Conference Call and Webcast Details
SiriusXM Canada will hold a conference call to discuss the Company's Q1 FY2015 results on Monday, January 12, 2015 at 5.00 p.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 Monday, January 19, 2015 at midnight. To access the archived conference call, please dial 416-849-0833, or 1-855-859-2056 and enter the reservation code 57510069. A live audio webcast of the conference call 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.
The following is a reconciliation of EBITDA and Adjusted EBITDA to Operating Income.
|(In $000's)||Q1 FY2015||Q1 FY2014|
|Depreciation & Amortization||6,942||9,908|
|Stock based compensation||1,306||862|
|Fair value adjustments*||3||31|
|* 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 January 12, 2015 for more details on the Company's Q1 FY2015 results. 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 interim financial statements for Q1 FY2015. Please see the Company's Management Discussion & Analysis filed January 12, 2015 for complete definition of non-GAAP measures.
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 2.6 million subscribers, 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, entertainment and major sports brands including the NHL, NFL, NBA, 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 five years in a row and 2013 and 2014 rankings in PROFIT 500's list of Canada's Fastest Growing Companies.
|CONSOLIDATED INTERIM BALANCE SHEETS|
|At||November 30,||August 31,|
|Cash and cash equivalents||37,657,927||23,868,423|
|Prepaid expenses and other||4,426,859||4,251,306|
|Total current assets||55,978,632||42,133,299|
|Long-term prepaid expenses||427,296||456,039|
|Property and equipment||3,962,994||4,508,188|
|Deferred tax assets||47,051,499||50,592,132|
|LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIENCY)|
|Trade and other payables||44,941,727||44,121,466|
|Due to related parties||8,505,812||9,146,135|
|Total current liabilities||215,460,722||203,849,895|
|Other long-term liabilities||659,773||533,049|
|Due to related parties||1,239,051||1,323,965|
|Shareholders' equity (deficiency)|
|Total shareholders' deficiency||(91,233,929)||(87,227,212)|
|Total liabilities and shareholders' deficiency||335,956,329||329,393,546|
| CONSOLIDATED INTERIM STATEMENTS OF OPERATIONS AND
| For three months ended
| November 30,
| November 30,
|Depreciation and amortization||6,942,310||9,907,716|
|Finance costs, net|
|Foreign exchange loss||(64,466)||(52,858)|
|Finance costs, net||(3,091,337)||(3,763,919)|
|Net income before income tax||11,564,529||6,854,247|
|Income tax expense||(3,540,633)||(2,050,804)|
|Net income and comprehensive income||8,023,896||4,803,443|
|Earnings per share - basic and diluted||0.06||0.04|
| CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN
SHAREHOLDERS' EQUITY (DEFICIENCY)
|For the three months ended,||Share||Contributed||Accumulated||Shareholders'|
|(Canadian dollars)||Capital||Surplus||deficit||Equity (deficiency)|
|Balance, September 1, 2013||151,794,596||6,161,440||(149,712,623)||8,243,413|
|Net income for the period (Restated)||—||—||4,803,443||4,803,443|
|Stock options exercised||1,591,452||(566,463)||—||1,024,989|
|Balance, November 30, 2013||153,386,048||6,457,407||(157,956,179)||1,887,276|
|Balance, September 1, 2014||176,862,133||6,067,419||(270,156,764)||(87,227,212)|
|Net income for the period||—||—||8,023,896||8,023,896|
|Stock options exercised||260,501||(149,121)||—||111,380|
|Balance, November 30, 2014||177,122,634||7,223,897||(275,580,460)||(91,233,929)|
| CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS
| For the three months ended
|November 30, 2014|| November 30, 2013
|Cash provided by (used in)|
|Net income (loss) for the period||8,023,896||4,803,443|
|Add (deduct) items not involving cash|
|Amortization of intangible assets||6,492,759||8,650,080|
|Depreciation of property and equipment||449,551||1,257,636|
|Income tax expense||3,540,633||2,050,804|
|Foreign exchange loss||73,907||61,981|
| Net change in non-cash working capital and deferred
revenue related to operations
|Cash provided by operating activities||17,342,431||15,612,721|
|Purchase of property and equipment||(205,214)||(561,968)|
|Purchase of intangible assets||(3,459,093)||(2,231,638)|
|Cash used in investing activities||(3,664,307)||(2,793,606)|
|Proceeds from exercise of stock options||111,380||1,024,989|
|Cash provided by financing activities||111,380||1,024,989|
|Net increase in cash and cash equivalents during the period||13,789,504||13,844,104|
|Cash and cash equivalents, beginning of period||23,868,423||44,078,584|
|Cash and cash equivalents, end of period||37,657,927||57,922,688|
SOURCE Sirius XM Canada Holdings Inc.
For further information:
Sirius XM Canada
416-815-0700 ext 273