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Press release from CNW Group

Astral shows continued growth in the third quarter of Fiscal 2012

Thursday, July 12, 2012

Astral shows continued growth in the third quarter of Fiscal 201207:55 EDT Thursday, July 12, 20127% increase in net earnings19% increase in diluted EPS1MONTREAL, July 12, 2012 /CNW Telbec/ - Astral Media Inc. (TSX: ACM.A ACM.B) today reported its financial results for the third quarter ended May 31, 2012, which saw continued growth in net earnings, EPS, EBITDA2 and cash flow from operations2.For the third quarter, consolidated net earnings1 grew by 7% to $56.2 million from $52.6 millionfor the same period last year, while diluted earnings per share grew 9% to $1.00 from $0.92 per share last year. Consolidated revenues for the third quarter totalled $265.5 million, a 1% decrease over the $268.0 million recorded last year for the same period. EBITDA2 rose by 2% to $89.2 million from $87.8 million for the same period last year. Cash flow from operations2 rose by 2% to $68.7 million for the third quarter compared to $67.3 million for the corresponding period last year.For the first nine months of the year, consolidated net earnings1 grew by 7%over last year to $150.1 millionfrom $140.4 million, while diluted earnings per share1 grew 9% to $2.67 from $2.45 last year. Consolidated revenues for the first nine months of Fiscal 2012 totalled $770.1 million, a slight increase over the $767.8 million recorded last year for the same period. EBITDA2 rose by 2% to $245.6 million from $241.2 million for the same period last year. Cash flow from operations2 rose by 3% to $187.9 million for the first nine months of the year compared to $182.7 million for the corresponding period last year."I am pleased by the third quarter results announced today and by Astral's ability to continue to achieve a strong performance in spite of the challenging advertising market in which we operate," said Ian Greenberg, President and Chief Executive Officer. "Our relentless focus on maintaining our operational margins, commitment towards new product development and innovation, and optimal treasury management practices, enabled us to deliver another strong quarter of earnings growth."FINANCIAL AND OPERATIONAL HIGHLIGHTSTelevisionRevenue decline of 2% for the quarter (1% growth for the nine-month period);EBITDA2 growth of 2% for the quarter (2% growth for the nine-month period2);Launch, on July 4, of the new Cartoon Network service, available to over one million subscribers on Cogeco, Eastlink and Telus.RadioRevenue decline of 1% for the quarter (2% decline for the nine-month period);EBITDA2 growth of 1% for the quarter (3% decline for the nine-month period).Out-of-HomeRevenue growth of 3% for the quarter (8% growth for the nine-month period);EBITDA2 growth of 2% for the quarter (11% growth for the nine-month period);Announcement, on June 12, of the addition of two new Digital Network faces in the Greater Montréal region, bringing Astral's popular national Digital Network to 41 faces;Announcement, on June 19, of the launch of a new innovative urban Digital Columns network of 30 faces in the heart of downtown Montréal.CorporateFollowing the announcement of the Bell-Astral Transaction3, the Company's dividend payment scheduled for August 2012 and activity under the Normal Course Issuer Bid have been suspended;During the third quarter, the Company repaid $70.0 million of its long-term debt for a total of $100.0 million after nine months;On May 24, Astral shareholders approved the acquisition of all of the Company's issued and outstanding shares by BCE Inc. (the "Bell-Astral Transaction");On May 25, the Québec Superior Court approved the plan of arrangement under section 192 of the Canada Business Corporations Act relative to the Bell-Astral Transaction3 and declared that the plan of arrangement is fair to shareholders of Astral.The unaudited interim condensed consolidated financial statements with related notes and Management's Discussion and Analysis are available on the Company's website: www.astral.com.There will be a conference call with analysts at 10:30 a.m. on Thursday, July 12, 2012. 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 www.astral.com.Founded in 1961, 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 www.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. Except as required under applicable securities regulations, we disclaim any intention or obligation to update or revise any forward-looking statements.1. Excluding acquisition and other costs, as well as Bell-Astral transaction costs. See details in the "Additional IFRS and Non-IFRS Measures" in Appendix 1.2. See "Additional IFRS and Non-IFRS Measures" in Appendix 1.3. See the "Acquisition of Astral" section in the Management's Discussion and Analysis.ASTRAL MEDIA INC.Interim Consolidated Statements ofEarningsfor the periods ended May 31, 2012 and 2011 (in thousands of Canadian dollars except for per-share data)(unaudited)              3months9months  2012 2011 2012 2011         Revenues$265,522$268,040$770,125$767,811         Operating expenses 176,365 180,172 524,523 526,562Bell-Astral Transaction costs 6,232 - 6,232 -Acquisition and other costs 554 4,407 4,865 4,407Depreciation of property, plant and equipment 7,203 7,150 22,069 21,031Amortization of other intangible and non-current assets 1,985 1,516 5,923 6,030Financial expense, net 3,387 4,980 11,313 16,150         Earnings before income taxes 69,796 69,815 195,200 193,631         Income tax provision 18,608 20,275 53,251 56,346         Net earnings$51,188$49,540$141,949$137,285         Earnings per share        - Basic$0.92$0.88$2.55$2.43- Diluted$0.91$0.87$2.53$2.40ASTRAL MEDIA INC. Interim Consolidated Statements of Comprehensive Incomefor the periods ended May 31, 2012 and 2011(in thousands of Canadian dollars)(unaudited)                    3months 9months  2012 2011 2012 2011         Net earnings$51,188$49,540$141,949$137,285Other comprehensive income        Actuarial gain (loss) on employee future benefit plans, net of income tax expense (recovery) of ($1.9 million)and ($1.4 million) respectively for the three months, and ($5.6 million) and $0.1 million respectively forthe nine months (5,271) (3,942) (15,634) 289Change in fair value of derivatives designated as cash flow hedges, net of income tax expense (recovery) of($0.3 million) and $0.4 million respectively for the three months, and $0.3 million and $1.8 millionrespectively for the nine months (780) 1,030 853 4,734         Comprehensive income$45,137$46,628$127,168$142,308ASTRAL MEDIA INC. Interim Consolidated Statements of Cash Flowsfor the periods ended May 31, 2012 and 2011(in thousands of Canadian dollars)(unaudited)                        3months 9months  2012 2011 2012 2011         OPERATINGACTIVITIES         Net earnings$51,188$49,540$141,949$137,285          Non-cash items:          Stock-based compensation costs 5,681 1,759 9,705 5,975  Depreciation and amortization 9,188 8,666 27,992 27,061  Imputed interest, net 407 452 1,092 1,210  Amortization of deferred financing costs 272 172 749 515  Deferred tax expense 2,013 6,679 6,423 10,656          Cash flows from operations 68,749 67,268 187,910 182,702 Net change in non-cash operating items 8,666 14,294 (30,181) (5,762)         Cash provided by operating activities 77,415 81,562 157,729 176,940         INVESTING ACTIVITIES         Additions to property, plant and equipment (9,271) (11,959) (21,653) (29,646) Additions to other intangible and non-current assets (899) (2,434) (3,195) (10,283) Business acquisition, net of cash acquired (301) - (11,821) -Cash used for investing activities (10,471) (14,393) (36,669) (39,929)         FINANCING ACTIVITIES         Repayment of long-term debt (70,000) (55,000) (100,000) (65,000) Deferred financing costs - - (2,017) - Stock options exercised 1,936 260 19,212 12,863 Shares repurchased - (20,485) (14,126) (51,925) Dividends - (4) (27,923) (21,379)Cash used for financing activities (68,064) (75,229) (124,854) (125,441)         Net change in cash (1,120) (8,060) (3,794) 11,570Cash - beginning of period 19,979 31,175 22,653 11,545Cash - end of period$18,859$23,115$18,859$23,115ASTRAL MEDIA INC.  Interim Consolidated Balance Sheets as at(in thousands of Canadian dollars)(unaudited)                May31, August 31, September 1,  2012 2011 2010ASSETS             Current       Cash$18,859$22,653$11,545 Accounts receivable 181,273 170,063 169,240 Program and film rights 105,564 105,385 106,723 Prepaid expenses and other current assets 29,239 29,096 29,451  334,935 327,197 316,959       Program and film rights 57,338 51,058 41,640Property, plant and equipment 195,004 195,508 180,616Broadcast licences 1,652,392 1,639,785 1,661,949Goodwill 118,489 116,016 116,016Other intangible and non-current assets 65,193 70,543 64,162Non-current financial assets 16,227 19,852 22,848Deferred tax assets 68,602 60,747 64,683        $2,508,180$2,480,706$2,468,873       LIABILITIES             Current       Accounts payable and accrued liabilities$130,837$142,627$143,780 Provisions 3,073 4,621 3,380 Income taxes payable 22,736 13,560 16,654 Program and film rights payable 74,791 77,033 64,908 Other current financial liabilities - 1,945 -  231,437 239,786 228,722       Long-term debt 422,865 524,133 588,447Deferred tax liabilities 159,578 152,455 144,424Program and film rights payable 10,447 8,839 12,668Provisions 5,740 5,453 5,244Other non-current liabilities 76,152 57,124 63,820Other non-current financial liabilities 9,791 10,116 20,311  916,010 997,906 1,063,636       SHAREHOLDERS' EQUITY             Capital stock 779,386 762,572 768,762Contributed surplus 18,588 17,278 18,903Retained earnings 794,753 704,360 624,609Accumulated other comprehensive loss (557) (1,410) (7,037)  794,196 702,950 617,572  1,592,170 1,482,800 1,405,237        $2,508,180$2,480,706$2,468,873 ASTRAL MEDIA INC.Business Segmentsfor the periods ended May 31, 2012 and 2011(in thousands of Canadian dollars) (unaudited)                   3 months 9 months  2012 2011 2012 2011             REVENUES                 Television$151,488$153,987$445,601$442,550Radio 89,376 90,096 251,864 258,123Out-of-Home 24,658 23,957 72,660 67,138          $265,522$268,040$770,125$767,811                  EBITDA(1)                 Television$59,117$58,207$167,390$164,104Radio 29,456 29,227 75,443 77,710Out-of-Home 8,199 8,072 24,344 21,938Corporate (7,615) (7,638) (21,575) (22,503)          $89,157$87,868$245,602$241,249 (1)     See Appendix 1.ASTRAL MEDIA INC.Appendix 1Additional IFRS and Non-IFRS Measuresfor the periods ended May 31, 2012 and 2011(unaudited)In addition to discussing earnings measures in accordance with International Financial Reporting Standards ("IFRS"), this Press Release provides the following additional IFRS and non-IFRS measures which are also factors used by the Company's management and Board of Directors in monitoring and evaluating the performance of the Company and its business segments:Additional IFRS Measure Cash flow from operations is defined as cash provided by 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.Non-IFRS Measures 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. Other items such as acquisition and other costs and Bell-Astral Transaction costs are also excluded from earnings in the determination of EBITDA as they are not considered to be in the ordinary course of business. 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 IFRS measures disclosed in the unaudited interim consolidated statements of earnings for the periods ended May 31, 2012 and 2011 to EBITDA: 3 months 9 months(in thousands of $)20122011 2012        2011     Earnings before income taxes         69,79669,815    195,200193,631Depreciation and amortization  9,188        8,666      27,992     27,061Financial expense, net  3,3874,980      11,313     16,150Acquisition and other costs   5544,407        4,865       4,407Bell-Astral Transaction costs6,232-        6,232-EBITDA         89,157      87,868    245,602   241,249Net earnings and diluted earnings per share before acquisition and other costs and Bell-Astral Transaction costs. These measures provide an indication of the Company's ability to generate earnings from its ongoing operations, by excluding some items such as acquisition and other costs and Bell-Astral Transaction costs as they are not considered to be in the ordinary course of business.The following tables reconcile IFRS measures disclosed in the unaudited interim consolidated statements of earnings for the periods ended May 31 2012 and 2011 to net earnings and diluted earnings per share before acquisition and other costs and Bell-Astral Transaction costs: 3months 9 months(in thousands of $)2012  20122011      Net earnings51,18849,540 141,949137,285Acquisition and other costs, net of income taxes4063,091 3,6043,091Bell-Astral Transaction costs, net of income taxes4,570- 4,570-Net earnings before acquisition and other costs and Bell-Astral Transaction costs56,16452,631 150,123140,376             3 months 9 months(in dollars)20122011 20122011      Diluted earnings per share0.910.87 2.532.40Acquisition and other costs, net of income taxes0.010.05 0.060.05Bell-Astral Transaction costs, net of income taxes0.08- 0.08-Diluted earnings per share before acquisition and other costs and Bell-Astral Transaction costs1.000.92 2.672.45The above additional IFRS and non-IFRS measures do not have a standardized meaning prescribed by IFRS and may not be comparable to similar measures presented by other companies.     For further information: Media: Hugues Mousseau Director, Corporate Communications and Synergies Astral Media Inc. 514-939-5000 hmousseau@astral.com Analysts : Robert Fortier Vice-President, Finance and Chief Financial Officer Astral Media Inc. 514-939-5000 rfortier@astral.com