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Press release from CNW Group

Astral reports strong first quarter results for Fiscal 2013

Thursday, January 10, 2013

Astral reports strong first quarter results for Fiscal 201307:55 EST Thursday, January 10, 20137% increase in net earnings15% increase in diluted EPS14% increase in EBITDA2MONTREAL, Jan. 10, 2013 /CNW Telbec/ - Astral Media Inc. (TSX: ACM.A ACM.B) today reported its financial results for the first quarter ended November 30, 2012, which saw continued growth in net earnings1, EPS1, EBITDA2, revenues and cash flow from operations2.In the first quarter, consolidated net earnings1 rose 7% to $59.6 million from $55.8 million for the same period last year, while diluted earnings per share1 increased by 5% to $1.05 from $1.00 last year. EBITDA2 grew 4% to $93.7 million from $90.4 million last year, while consolidated revenues totalled $274.5 million, an increase of 1% over the $271.1 million recorded last year for the same period. Cash flow from operations at $69.2 million is slightly above last year's figure of $69.0 million."I am very pleased with our Company's consolidated and segmented performance in the first quarter of Fiscal 2013, marking the single largest quarter in the Company's history" said Ian Greenberg, President and Chief Executive Officer. "Our relentless focus on delivering better value to advertisers and consumers combined with the discipline that defines Astral's decision-making approach provide us with the optimal strategy to reach our objectives and continue to deliver balanced growth across our diversified asset portfolio."BELL-ASTRAL TRANSACTION3On March 16, 2012, the Company announced that it entered into a definitive agreement with BCE Inc. ("Bell") for the sale of its business through the acquisition of all of its issued and outstanding shares. Following the October 18, 2012 decision of the CRTC to deny Bell's application to acquire the control of the Company, the Company and Bell announced on November 19, 2012 that they have amended the arrangement agreement signed on March 16, 2012 and submitted a new proposal to the CRTC for approval of Bell's acquisition of the Company.As a result of the amendments made to the terms of the arrangement agreement: (i) the outside date for the closing of the transaction has been extended to June 1, 2013, with each of the Company and Bell having a further right to postpone it to July 31, 2013, (ii) Bell's regulatory covenants have been modified, and (iii) the Company's Board of directors has declared a cash dividend of $0.50 per share on its class A non-voting shares and class B subordinate voting shares, payable on February 1, 2013 to shareholders of record at the close of business on January 15, 2013. The consideration payable to the Company's shareholders remains unchanged under the amended arrangement agreement. The Bell-Astral Transaction is subject to closing conditions, including regulatory approvals from the CRTC and the Competition Bureau. There can be no assurance that the Bell-Astral Transaction will occur, or that it will occur on the terms and conditions currently contemplated.SEGMENTED FINANCIAL AND OPERATIONAL HIGHLIGHTSTelevisionRevenue growth of 2%;EBITDA2 growth of 5%;EBITDA margin2 of 39.3%, up from 38.2% for the same period last year.RadioRevenue growth of 1%;EBITDA2 growth of 1%;EBITDA margin2 of 31.3%, consistent with last year;Prior to the beginning of the first quarter, rebranding of two stations in London and Winnipeg to the prestigious Virgin Radio brand, bringing the total of Astral Virgin Radio stations to seven;On November 23, inauguration of Canada's largest private radio broadcasting centre with five Astral French- and English-language stations under the same roof in Montréal.Out-of-HomeRevenue growth of 2%;EBITDA2 growth of 1%;EBITDA margin2 of 40.0%, consistent with last year;In September, launch of a brand new network of 30 urban Digital Columns in the heart of downtown Montréal;Announcement of the addition of 6 new Digital faces by February 2013 on Toronto's Gardiner Expressway, bringing Astral's popular national Digital Network to 49 faces.CorporateOver the course of the first quarter, the Company repaid $7.0 million of its long-term debt, bringing its Net Debt and leverage ratio just below $356.0 million and 1.1 respectively;Astral announced in November a cash dividend of $0.50 per share on its class A non-voting shares and class B subordinate voting shares, payable on February 1, 2013.The unaudited interim condensed consolidated financial statements and related notes and Management's Discussion and Analysis are available on the Company's website: astral.com.There will be a conference call with analysts and media at 10:30 a.m. ET on Thursday, January 10, 2013. To access the conference call dial 1-800-731-5319. The conference call will also be broadcasted live and archived for a three-month period on the Astral website at astral.com.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 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. We disclaim any intention or obligation to update or revise any forward-looking statements. 1. Excluding Bell-Astral transaction costs. See "Additional IFRS and Non-IFRS Measures" in Appendix 1.2. For more details, see "Additional IFRS and Non-IFRS Measures" in Appendix 1.3. For more details, see the "Bell-Astral Transaction" section in the Management's Discussion and Analysis for the periods ended November 30, 2012 and 2011 and the press release issued by the Company on November 19, 2012.ASTRAL MEDIA INC.Interim Consolidated Statements of Earningsfor the three months ended (in thousands of Canadian dollars except for per-share data)(unaudited)  November 30  2012  2011      Revenues$274,465 $271,100      Operating expenses 180,811  180,699Depreciation of property, plant and equipment 6,931  7,506Amortization of other intangible and non-current assets 2,363  1,962Financial expense, net 2,836  3,953Bell-Astral Transaction costs 660  -      Earnings before income taxes 80,864  76,980      Income tax expense 21,759  21,224      Net earnings$59,105 $55,756      Earnings per share      - Basic$1.06 $1.01 - Diluted$1.04 $1.00ASTRAL MEDIA INC. Interim Consolidated Statements of Comprehensive Incomefor the three months ended(in thousands of Canadian dollars)(unaudited)   November 30  2012  2011      Net earnings$59,105 $55,756Item that is never subsequently reclassified to statements of earnings      Actuarial loss on employee future benefit plans, net of income tax recovery of$1.8 million and $2.4 million respectively (4,830)  (6,772)Item that may be subsequently reclassified to statements of earnings      Change in fair value of derivatives designated as cash flow hedges, net ofincome tax expense (recovery) of ($0.2 million) and $0.1 million respectively (663)  110     Other comprehensive loss (5,493)  (6,662)Comprehensive income$53,612 $49,094 ASTRAL MEDIA INC. Interim Consolidated Statements of Cash Flowsfor the three months ended (in thousands of Canadian dollars)(unaudited)   November 30,  2012  2011      OPERATING ACTIVITIES      Net earnings$59,105 $55,756       Non-cash items:       Stock-based compensation costs 2,098  2,152  Depreciation and amortization 9,294  9,468  Imputed interest, net 288  259  Amortization of deferred financing costs 281  205  Deferred tax expense (recovery) (1,902)  1,122       Cash flows from operations 69,164  68,962       Net change in non-cash operating items (44,841)  (45,111)      Cash provided by operating activities 24,323  23,851      INVESTING ACTIVITIES      Additions to property, plant and equipment (9,708)  (5,574) Additions to other intangible and non-current assets (999)  (952)Cash used for investing activities (10,707)  (6,526)      FINANCING ACTIVITIES      Repayment of long-term debt (7,000)  (10,000) Deferred financing costs -  (2,011) Stock options exercised 1,702  3,110 Shares repurchased -  (7,757)Cash used for financing activities (5,298)  (16,658)Net change in cash 8,318  667Cash - beginning of period 20,892  22,653Cash - end of period$29,210 $23,320ASTRAL MEDIA INC.  Interim Consolidated Balance Sheets as at(in thousands of Canadian dollars)(unaudited)     November 30,2012 August 31,2012ASSETS           Current      Cash$29,210 $20,892 Accounts receivable 193,823  174,384 Program and film rights 123,080  114,753 Prepaid expenses and other current assets 41,861  29,007  387,974  339,036      Program and film rights 52,588  51,208Property, plant and equipment 209,824  210,035Broadcast licences 1,631,307  1,631,307Goodwill 118,489  118,489Other intangible and non-current assets 63,178  64,750Non-current financial assets 15,491  16,084Deferred tax assets 40,530  34,582 $2,519,381 $2,465,491      LIABILITIES           Current      Accounts payable and accrued liabilities$150,184 $141,729 Provisions 3,208  5,319 Income taxes payable 20,408  15,531 Program and film rights payable 74,744  63,619  248,544  226,198      Long-term debt 383,419  390,138Deferred tax liabilities 133,422  131,377Program and film rights payable 9,877  7,446Provisions 6,305  6,717Other non-current liabilities 80,935  76,556Other non-current financial liabilities 9,351  8,466  871,853  846,898      SHAREHOLDERS' EQUITY           Capital stock 783,133  778,548Contributed surplus 19,199  20,445Retained earnings 845,729  819,470Accumulated other comprehensive income (loss) (533)  130  845,196  819,600  1,647,528  1,618,593 $2,519,381 $2,465,491ASTRAL MEDIA INC.Business Segmentsfor the three months ended November 30,(in thousands of Canadian dollars)(unaudited)        2012  2011      REVENUES           Television$155,827 $153,552Radio 88,786  88,291Out-of-Home 29,852  29,257       $274,465 $271,100      EBITDA(1)           Television$61,251 $58,608Radio 27,773  27,591Out-of-Home 11,935  11,835Corporate (7,305)  (7,633)       $93,654 $90,401 (1) See Appendix 1.ASTRAL MEDIA INC.Appendix 1Additional IFRS and Non-IFRS Measuresfor the periods ended November 30, 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 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 November 30, 2012 and 2011 to EBITDA: November 30(in thousands of $)2012         2011 ("Fiscal 2013") ("Fiscal 2012")    Earnings before income taxes80,864 76,980Depreciation and amortization9,294 9,468Financial expense, net2,836 3,953Bell-Astral Transaction costs660 -EBITDA93,654 90,401Net earnings and diluted earnings per share before 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 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 November 30 2012 and 2011 to net earnings and diluted earnings per share before Bell-Astral Transaction costs: November 30(in thousands of $)2012        2011   Net earnings59,10555,756Bell-Astral Transaction costs, net of income taxes484-Net earnings before Bell-Astral Transaction costs59,58955,756   November 30(in dollars)2012        2011   Diluted earnings per share1.041.00Bell-Astral Transaction costs, net of income taxes0.01-Diluted earnings per share before Bell-Astral Transaction costs1.051.00The 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.  SOURCE: Astral Media Inc.For further information: Media: Olivier Racette Advisor, Corporate Communications Astral Media Inc. 514-939-5000 Analysts : Robert Fortier Vice-President, Finance and Chief Financial Officer Astral Media Inc. 514-939-5000