Canadian Satellite Radio Holdings Inc., parent of Sirius XM Canada Inc., released unaudited financial results for the quarter ended November 30, 2012 (Q1 FY2013) prepared in accordance with International Financial Reporting Standards (IFRS)1. A summary of IFRS financial results for Q1 F2013 is attached. All results are reported in Canadian dollars unless otherwise stated.
Q1 FY2013 Highlights
Adjusted EBITDA increased 39.4% to $18.0 million from $12.9 million in Q1 FY2012
Self-Paying Subscribers increased 14.3% to 1.6 million from 1.4 million at November 30, 2011
Revenue grew 9.2% to $68.9 million from $63.1 million for Q1 FY2012
Net income increased to $3.3 million from a loss of $3.4 million in Q1 FY2012
Free cash flow increased 51.4% to $13.7 million from $9.1 million for Q1 FY2012
Cash and cash equivalents of $64.9 million at November 30, 2012
Declared a special cash dividend of $0.0825 per Class A Subordinated Voting Share and $0.0275 per Class B Voting Share
Initiated a quarterly dividend of $0.0825 per Class A Share and Class C Non-Voting Shares and $0.0275 per Class B Share
Obtained a six-year broadcast license renewal from the CRTC
Launched Best Of programming, enabling subscribers to access premium content from both the Sirius and XM platforms
Launched enhanced Internet Radio service and mobile listening Apps, that also give subscribers access to on-demand functionality
"Fiscal 2013 is off to an excellent start," said Mark Redmond, President and CEO, SiriusXM Canada. "We generated record revenue, Adjusted EBITDA and free cash flow, and received a six-year broadcast license renewal from the CRTC. In addition, with the launch of our Best Of programming, new Internet Radio service and mobile streaming Apps in the quarter, we enhanced and extended our service offering, better positioning the Company for long-term growth. We believe the combination of these premium services, growing new vehicle sales, higher in-vehicle penetration rates and our efforts to better leverage opportunities in the pre-owned car market will fuel our continued success."
1 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 Summary
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 FY2013 Q1 FY2012
(ended November 30, 2012) (ended November 30, 2011)
Total Revenue $68,891 $63,111
Adjusted EBITDA** $17,957 $12,880
Net Income (Loss) $3,258 ($3,412)
Self-Paying Subscribers 1,618 1,416
Total Subscribers 2,221 2,014
Subscriber Acquisition Cost (SAC) $45 $54
Cost Per Gross Addition (CPGA) $70 $83
* 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.
"In the quarter, we continued to demonstrate the strong cash generation capabilities of the business, which translated into the announcement of a special dividend and the initiation of a quarterly dividend," said Michael Washinushi, CFO SiriusXM Canada. "We have a stable recurring revenue stream and can clearly manage our costs without sacrificing growth. We remain confident in the Company's ongoing financial strength, operational efficiency and ability to grow free cash flow."
Q1 FY2013 Financial Review
For Q1 FY2013, revenue was $68.9 million, up $5.8 million, or 9.2%, from $63.1 million in Q1 FY2012 as a result of the continued growth in the Company's revenue-generating subscriber base.
SAC was $45 in Q1 FY2013, down from $54 in Q1 FY2012. The year-over-year improvement was due to lower subsidy costs and higher gross additions.
CPGA was $70 in Q1 FY2013, down from $83 in Q1 FY2012. The year-over-year improvement reflects lower subsidy costs and higher gross subscriber additions, which were partially offset by slightly higher marketing costs.
Q1 FY2013 Adjusted EBITDA improved to $18.0 million, representing a 39.4%, or $5.1 million, increase, from Adjusted EBITDA of $12.9 million in Q1 FY2012. The year-over-year improvement was a result of the Company's top-line growth, which was offset, in part, by a slight year-over-year increase in operating expenses due to a larger subscriber base.
In Q1 FY2013, SiriusXM Canada generated $13.7 million in free cash flow. The Company generated $15.1 million in cash from operations, used cash of $1.4 million in investing activities and generated $0.2 million of cash in financing activities. Comparatively, in Q1 FY2012, SiriusXM Canada generated $9.1 million in free cash flow. The Company generated $10.0 million in cash from operations, used cash of $0.9 million in investing activities and generated $0.1 million of cash in financing activities.
As at November 30, 2012, SiriusXM Canada had total cash and cash equivalents of $64.9 million, up from $51.0 million at August 31, 2012.
The following is a reconciliation of unaudited EBITDA and unaudited Adjusted EBITDA to Operating Income.
(In $000's) Q1 FY2013 Q1 FY2012
Operating income 8,629 281
Amortization 8,434 10,940
EBITDA 17,063 11,221
Stock based compensation 794 394
Integration, severance and merger costs - 918
Fair value adjustments* 101 346
Adjusted EBITDA 17,957 12,880
* Fair value adjustment relates to the reduction in revenue due to the valuation of deferred revenue as per purchase price accounting
Please see the Company's Management Discussion & Analysis filed January 14, 2013 for more details on the Company's Q1 FY2013 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 unaudited consolidated statement of operations and comprehensive income. Please see the Company's Management Discussion & Analysis filed January 14, 2013 for complete definition of non-GAAP measures.