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Press release from CNW Group

SiriusXM Canada Delivers Continued Growth with Strong Fiscal 2012 Year End and Fourth Quarter Results

Wednesday, November 14, 2012

SiriusXM Canada Delivers Continued Growth with Strong Fiscal 2012 Year End and Fourth Quarter Results23:31 EST Wednesday, November 14, 2012Company achieves $20 million in annualized cost synergiesTotal Subscribers of 2.2 million; year-over-year net additions of 223,100Record annual revenue of $259.6 millionAdjusted annual EBITDA** of $46.6 million, up 75.6% year-over-year Free cash flow of $36.6 million, up 751% year-over-yearTORONTO, Nov. 14, 2012 /CNW/ - Canadian Satellite Radio Holdings Inc. ("SiriusXM Canada" or the "Company") (TSX: XSR), parent of Sirius XM Canada Inc., today released audited financial results for the year ended August 31, 2012 (FY2012) and unaudited financial results for the quarter ended August 31, 2012 (Q4 FY2012) prepared in accordance with International Financial Reporting Standards (IFRS). A summary of IFRS financial results for FY2012 and Q4 FY2012 is attached1. To provide a basis of comparison of the performance of the combined entity formed through the business combination of Sirius Canada and XM Canada, the Company has also provided unaudited combined financial information (referred to as "Combined Information") for the comparative year and quarter ended August 31, 2011. All results are reported in Canadian dollars unless otherwise stated.FY2012 Annual Financial Highlights Compared to Combined Information for 2011Adjusted EBITDA increased 75.6% to $46.6 million from $26.5 million in 2011Self-Paying Subscribers increased 13.8% to 1.6 million from 1.4 million at August 31, 2011Revenue grew 8.9% to $259.6 million from $238.4 million for 2011Free cash flow increased $32.3 million to $36.6 million from $4.3 million for 2011Reported cash and cash equivalents of $51.0 million at August 31, 2012Q4 FY2012 Financial Highlights Compared to Combined Information for the Comparative Period in 2011Adjusted EBITDA increased 10.5% to $12.2 million from $11.1 million in Q4 2011Revenue grew 11.5% to $68.1 million from $61.1 million in Q4 2011Free cash flow increased $9.3 million to $8.5 million, from $(0.8) million in Q4 2011"In fiscal 2012, we delivered significant growth in all of our key metrics and further solidified our position as a leader in the Canadian audio entertainment marketplace, with more than 2.2 million subscribers at year end,"said Mark Redmond, President and CEO, SiriusXM Canada."Through a combination of double-digit subscriber growth and effective cost management, we expanded our Adjusted EBITDA margin and drove strong free cash flow. We are extremely pleased with our first-year's performance as a merged entity.""Looking to fiscal 2013, we are confident our growth will continue as we work to increase in-vehicle penetration rates and better leverage opportunities in the pre-owned car market," Mr. Redmond continued. "In addition, with the recent launch of SiriusXM 2.0 and Best-Of programming, subscribers are now able to access premium content from both Sirius and XM platforms and enjoy our new Internet Radio service and mobile streaming apps. These innovations enhance and extend our subscribers' entertainment experience while positioning the company for continued leadership in the audio entertainment space. We believe these premium services, in addition to the modest price increase of our base subscription rate will contribute to growth in fiscal 2013 and beyond."_________________________1 For a complete set of financial results including the accompanying notes please refer to the Company's filings on www.sedar.comFinancial and Operational SummaryCombined Information for 2011 quarterly and annual results 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 *IFRSFY2012CombinedFY2011IFRSQ4 FY2012CombinedQ4 2011 (ended August 31, 2012)(ended August 31, 2011)(ended August 31, 2012)(ended August 31, 2011) (Audited)(Unaudited)(Unaudited)(Unaudited)Total Revenue$259,619$238,389$68,119$61,112Adjusted EBITDA**$46,562$26,522$12,220$11,062Net Income (Loss)($4,179)($17,336)$6,117$3,500     Operating*    Self-Paying Subscribers1,5841,3931,5841,393Total Subscribers2,2061,9832,2061,983Subscriber Acquisition Cost (SAC)$49$54$46$50Cost Per Gross Addition (CPGA)$75$84$76$75* 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 (loss) to both EBITDA and Adjusted EBITDA is provided below."We are pleased to announce that we have achieved our goal of $20 million in annualized synergies earlier than expected, as a result of our consistent focus on managing costs and optimizing operating efficiencies throughout fiscal 2012," said Michael Washinushi, CFO SiriusXM Canada. "In addition, we further strengthened our balance sheet during the year, reducing our liabilities by $12.1 million and ending Q4 with $51 million in cash and cash equivalents."Financial review of FY2012 annual and Q4 IFRS results compared to Combined Information for the comparative quarterly and annual periods in 2011For FY2012, revenue was $259.6 million, up $21.2 million, or 8.9%, from $238.4 million in 2011, entirely as a result of the growth in the Company's revenue-generating subscriber base. Q4 FY2012 revenue was $68.1 million, up $7.0 million, or 11.5%, from $61.1 million for the same period in 2011.SAC was $49 in FY2012 down from $54 in 2011. SAC for Q4 FY2012 was $46, down from $50 for the same period in 2011. The decrease for the year and the quarter was due to lower subsidies and distribution costs and higher gross additions.CPGA was $75 in FY2012 down from $84 in 2011 as a result of a decrease in marketing costs achieved through increased operating efficiencies and post-merger cost synergies coupled with higher gross subscriber additions. CPGA for Q4 FY2012 was $76, up slightly from $75 for the same period in 2011 primarily due to an in increase in marketing costs related to customer outreach around the pricing changes and rebranding costs in preparation for the holiday selling season.FY2012 Adjusted EBITDA improved to $46.6 million, representing a 75.6% increase, or $20.1 million improvement, from Adjusted EBITDA of $26.5 million in 2011. The year-over-year increase was a result of the Company's top-line growth combined with a decrease in marketing, administrative and IT expenses, which was offset, in part, by a higher cost of revenue. Adjusted EBITDA for Q4 FY2012 was $12.2 million, up 10.5%, or $1.1 million, from $11.1 million for the same period in 2011.In FY2012, SiriusXM Canada generated $41.1 million in cash from operations, used cash of $4.4 million in investing activities and used $11.6 million of cash in financing activities. The Company generated $36.6 million in free cash flow in FY2012. In Q4 FY2012, the Company generated $10.4 million in cash from operations, used $1.9 million of cash in investing activities, and less than $0.1 million in cash was provided by investing activities.The Company generated $8.5 million in free cash flow in Q4 FY2012.As at August 31, 2012, SiriusXM Canada had total cash and cash equivalents of $51.0 million, up from $42.5 million as at May 31, 2012 and $26.0 million as at August 31, 2011.Conference Call and Webcast DetailsSiriusXM Canada will hold a conference call to discuss the Company's FY2012 annual and Q4 results on Thursday, November 15, 2012 at 8:30 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 Thursday, November 22, 2012 at midnight. To access the archived conference call, please dial 416-849-0833, or 1-855-859-2056 and enter the reservation code 49643642. A live audio webcast of the conference callwill be available at and 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 The following is a reconciliation of unaudited EBITDA and unaudited Adjusted EBITDA to Operating Income (loss).      (In $000's)IFRSFY2012CombinedFY2011 IFRSQ4 FY2012CombinedQ4 2011 (Audited)(Unaudited)** (Unaudited)(Unaudited)**Operating income (loss)2,844(18,940) 3,013(5,698)Amortization39,68932,590 8,69912,451EBITDA42,53313,650 11,7126,752Stock based compensation1,493280 333191Severance and merger costs1,38312,321 23,848Fair value adjustments*1,152271 173271Adjusted EBITDA 46,56226,522 12,22011,062* Fair value adjustment relates to the reduction in revenue due to valuation of deferred revenue as per purchase price accounting** In order to align with current reporting requirements, write off of intangibles of $4.2 million in 2011 has been reclassified from severance and merges costs to amortization. 2011 Adjusted EBITDA includes fair value adjustments to align with our current definition as of September 1, 2011.Please see the Company's Management Discussion & Analysis filed November 14, 2012 for a more detailed explanation of the differences between IFRS 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 November 14, 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 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 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. To find out more about SiriusXM Canada (TSX: XSR), visit our website at CONSOLIDATED BALANCE SHEETS     At  August 31,August 31,December 1,(Canadian dollars) 201220112010 (note 1)     ASSETS    Current assets    Cash and cash equivalents 51,034,74926,015,43947,610,454Accounts receivable 12,133,13810,718,6768,652,620Prepaid expenses   3,361,4482,587,7361,918,196Inventory   324,3162,265,4381,409,832Total current assets 66,853,65141,587,28959,591,102Long-term prepaid expenses 79,410901,56336,720Property and equipment   7,617,3999,680,3082,636,352Intangible assets 175,986,331206,113,6204,415,866Deferred tax assets 59,858,39451,545,684—Goodwill 96,732,52596,732,525—Total assets 407,127,710406,560,98966,680,040     LIABILITIES AND SHAREHOLDERS' EQUITY    Current liabilities    Trade and other payables 39,085,80032,870,62831,239,110Due to related parties   6,775,60117,203,49219,836,681Interest payable   2,704,4492,709,537—Current portion of deferred revenue 137,554,399126,995,70579,892,903Provisions   1,285,5872,123,5571,126,980Total current liabilities 187,405,836181,902,919132,095,674Deferred revenue 21,019,32020,084,37912,710,409Other long-term liabilities 6,902,5379,248,840200,156Due to related parties   1,208,3321,208,332—Deferred tax liabilities ——1,133,756Long-term debt 144,992,819146,143,284—Provisions   344,112497,197—Total liabilities 361,872,956359,084,951146,139,995     Shareholders' equity (deficiency)    Share capital 148,393,493147,169,43036,000,100Contributed surplus   5,057,5014,324,032—Accumulated deficit   (108,196,240)(104,017,424)(115,460,055)Total shareholders' equity (deficiency) 45,254,75447,476,038(79,459,955)Total liabilities and shareholders' equity 407,127,710406,560,98966,680,040       Approved by Board of Directors    (signed) John I. Bitove (signed) Anthony Viner     John I. Bitove, Director         Anthony Viner, Director CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (DEFICIENCY)     Total     Shareholders'  ShareContributedAccumulatedEquity(Canadian dollars) CapitalSurplusdeficit(deficiency)      Balance, December 1, 2010 36,000,100 — (115,460,055)(79,459,955)Return of Capital (36,000,000)——(36,000,000)CSRH shares outstanding at time of merger 154,596,684——154,596,684CSRH cash deficiency notes (7,517,868)——(7,517,868)Shares for interest - convertible note 67,999——67,999Stock options exercised 22,515(14,361)—8,154Equity component of convertible debt acquired —1,539,196—1,539,196Vested stock options at acquisition —2,614,513—2,614,513Stock-based compensation —184,684—184,684Net income for the period ——17,853,10817,853,108Dividends on Class C preferred shares ——(1,601,753)(1,601,753)Dividends on Class C common shares ——(5,942,481)(5,942,481)Part VI.1 tax reversal ——1,133,7571,133,757Balance, August 31, 2011 147,169,430 4,324,032 (104,017,424)47,476,038       Balance, September 1, 2011 147,169,430 4,324,032 (104,017,424)47,476,038 Net loss for the year ——(4,178,816)(4,178,816)Stock-based compensation —1,493,400—1,493,400Stock options exercised 1,224,063(759,931)—464,132Balance, August 31, 2012 148,393,493 5,057,501 (108,196,240)45,254,754             CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)     (Canadian dollars)  Year from September 1, 2011 to August 31, 2012Period fromDecember 1, 2010to August 31, 2011     Revenue  259,619,500 140,917,994     Operating expenses     Operating costs  215,703,343117,318,777 Integration, severance and merger costs    1,383,1053,501,293 Depreciation and amortization  39,689,05312,266,976Operating income    2,843,9997,830,948     Finance costs, net     Interest income  360,906 329,145 Interest expense  (16,699,532)(3,427,853) Foreign exchange loss  (210,372)(315,095) Loss on debt payment  —(1,908,263) Gain on revaluation of derivative  1,213,473 —Finance costs, net  (15,335,525)(5,322,066)     Net income (loss) before income tax  (12,491,526)2,508,882Income tax recovery  8,312,71015,344,226Net income (loss) and comprehensive income (loss)  (4,178,816)17,853,108     Basic and diluted (loss) earnings per share    (0.03)0.19           CONSOLIDATED STATEMENTS OF CASH FLOWS(Canadian dollars) Year from September 1, 2011 to August 31, 2012Period fromDecember 1, 2010to August 31, 2011Cash provided by (used in)       OPERATING ACTIVITIES   Net income (loss) for the period (4,178,816)17,853,108Add(deduct) items not involving cash    Amortization of intangible assets   36,899,66811,097,145 Depreciation of property and equipment   2,789,385 1,169,831 Deferred tax recovery (8,312,710)  (15,344,226) Stock-based compensation   1,493,400 184,684 Accrued interest   (5,088)2,709,537  Interest accretion   950,583 129,234 Loss on repayment of debt — 1,908,263 Share issued for interest settlement —   67,999 Revaluation of derivative (1,213,473)—  Unrealized foreign exchange losses (gains) 3,0107,879Net change in non-cash working capital and deferred revenue related to operations 12,649,125  (12,046,186)Cash provided by operating activities 41,075,0847,737,268    INVESTING ACTIVITIES   Cash acquired on acquisition — 2,223,112Proceeds on sale of property and equipment — 1,757Purchase of property and equipment (728,425)(180,198)Purchase of intangible assets (3,700,491)(1,931,242)Cash (used in) provided by investing activities (4,428,916)113,429    FINANCING ACTIVITIES   Distributions to shareholders —   (44,723,690)Proceeds from exercise of stock options    464,132 8,154Proceeds from debt — 62,000,000Debt financing fees — (4,118,803)Repayments of debt (917,700)  (42,611,373)Payment of related party promissory notes (11,173,290)—    Cash (used in) financing activities (11,626,858)  (29,445,712)    Net increase (decrease) in cash and cash equivalents during the period   25,019,310   (21,595,015)Cash and cash equivalents, beginning of period   26,015,439 47,610,454Cash and cash equivalents, end of period   51,034,749 26,015,439   SOURCE: SiriusXM CanadaFor further information: Morlan Reddock  Sirius XM Canada  416-513-7418  Kristen Dickson TMX Equicom 416-815-0700 ext 273