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Press release from CNW Group

SiriusXM Canada Reports Strong First Quarter Fiscal 2012 Results

Friday, February 10, 2012

SiriusXM Canada Reports Strong First Quarter Fiscal 2012 Results07:00 EST Friday, February 10, 2012Total Subscribers exceed 2.0 Million; Year-Over-Year Net Adds of 217,300Self-Paying Subscribers of more than 1.4 Million; Year-Over-Year Net Self-Pay Adds of 172,000Adjusted EBITDA** of $12.9 Million, up 152.0% on a combined basisFixed cash operating expense reduced by 19.5% Year-Over-Year, or $3.7 million1TORONTO, 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 HighlightsAdjusted EBITDA increased 152.0% to $12.9 million from $5.1 million in Q1 FY2011Grew total Subscribers 12.1% to more than 2.0 million from 1.8 million at November 30, 2010Increased Self-Paying Subscribers 13.8% to more than 1.4 million from 1.2 million at November 30, 2010Revenue grew 6.6% to $63.1 million from $59.2 million in Q1 FY2011Fixed 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 millionIncreased 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 expense2 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 HighlightsCombined 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 InformationFor 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 DetailsSiriusXM 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.ReconciliationsThe following is a reconciliation of unaudited EBITDA and unaudited Adjusted EBITDA to Operating Income (loss).(In $000's)    IFRSQ1 FY2012   CombinedQ1 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 accountingPlease 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 StatementsCertain 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 CanadaCanadian 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 StatementsCanadian 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   47,610,454Accounts receivable  11,868,165   10,718,676   8,652,620Prepaid expenses 2,088,554   2,587,736   1,918,196Inventory  1,383,864   2,265,438   1,409,832Total current assets 50,522,617   41,587,289   59,591,102            Long-term prepaid expenses 962,914   901,563   36,720Property and equipment  9,400,885   9,680,308   2,636,352Intangible assets 196,823,931   206,113,620   4,415,866Deferred 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   31,239,110Due to related parties 19,522,762   17,203,492   19,836,681Interest payable  6,326,861   2,709,537   —Current portion of deferred revenue  120,902,325   126,995,705   79,892,903Provisions 1,811,338   2,123,557   1,126,980Total current liabilities  185,821,588   181,902,919   132,095,674            Deferred revenue 19,765,444   20,084,379   12,710,409Other long-term liabilities 8,840,490   9,248,840   200,156Due to related parties  1,208,332   1,208,332   —Deferred tax liability —   —   1,133,756Long-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   36,000,100Contributed 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  952,475Operating income  281,210  3,612,149      Finance costs, net     Interest income 43,648  117,015Interest 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)  3,576,584Income 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 CHANGESIN SHAREHOLDERS' EQUITY (DEFICIENCY)(Unaudited)            (Canadian dollars)  ShareCapital  ContributedSurplus  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  3,576,584Dividends  —  —  (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)  47,476,038Total comprehensive income (loss) for the period  —  —  (3,411,757)  (3,411,757)Stock-based compensation  —  393,921  —  393,921Stock options exercised  297,375  (185,263)  —  112,112Balance, November 30, 2011  147,466,805  4,532,690  (107,429,181)  44,570,314 CONSOLIDATED INTERIM STATEMENT OF CASHFLOWS(Unaudited)      Three months ended   November 30,   February 28,(Canadian dollars)  2011  2011Cash provided by (used in)              OPERATING ACTIVITIES      Net income (loss) for the period  (3,411,757)  3,576,584Add(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 revenuerelated 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  1,197,985Cash and cash equivalents, beginning of period  26,015,439  47,610,454Cash and cash equivalents, end of period  35,182,034  48,808,439    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