MONTREAL, QUEBEC--(Marketwired - June 16, 2016) -
Full Year Highlights
- Revenues increased 26.7% to a record $89.9 million
- Recurring revenues of $77.6 million or 86% of total revenues, an increase of 22.1%
- Net income increased 110.1% to a record $13.9 million or $0.29 per share (diluted) compared to last
year
- Adjusted EBITDA increased 13.7% to an all-time high of $31.0 million
- Adjusted Net income up 36.3% to $24.3 million or $0.50 per share (diluted) compared to last year
- Adjusted free cash flow of $24.0 million, an increase of 40.8%
- Acquisition of Brava Group, iConcerts, DMD and Nümedia for total consideration of $33.1 million
- Annual dividend of $0.14 per share
Fourth Quarter Highlights
- Revenues increased 30.6% to $25.7 million
- Recurring revenues of $21.9 million or 85% of total revenues, an increase of 27.6%
- Net income increased 68.9% to $3.2 million or $0.06 per share (diluted) compared to last year
- Adjusted EBITDA increased 6.3% to $8.2 million
- Adjusted Net income up 35.6% to $7.1 million or $0.14 per share (diluted) compared to last year
- Adjusted free cash flow of $6.3 million, an increase of 17.4%
- Acquisition of Nümedia for total consideration of $1.9 million
- Quarterly dividend of $0.035 per share
Stingray Digital Group Inc. (TSX:RAY.A)(TSX:RAY.B) (the "Corporation"; "Stingray"), a leading business-to-business
multi-platform music and in-store media solutions provider, today announced its financial results for the fourth quarter and
fiscal year ended March 31, 2016.
Financial Highlights
(in thousands of dollars, except per share data) |
Three months ended
March 31, |
|
Fiscal year ended
March 31, |
|
|
2016 |
2015 |
% |
|
2016 |
2015 |
% |
|
Revenues |
25,658 |
19,648 |
30.6 |
|
89,944 |
70,989 |
26.7 |
|
Recurring revenues |
21,860 |
17,127 |
27.6 |
|
77,587 |
63,535 |
22.1 |
|
Adjusted EBITDA(1) |
8,219 |
7,731 |
6.3 |
|
31,004 |
27,275 |
13.7 |
|
Net income |
3,247 |
1,923 |
68.9 |
|
13,881 |
6,607 |
110.1 |
|
|
Per share - diluted ($) |
0.06 |
0.06 |
- |
|
0.29 |
0.19 |
52.6 |
|
Adjusted Net income(2) |
7,135 |
5,260 |
35.6 |
|
24,309 |
17,834 |
36.3 |
|
|
Per share - diluted ($) |
0.14 |
0.15 |
(6.7 |
) |
0.50 |
0.53 |
(5.7 |
) |
Cash flow from operating activities |
7,709 |
1,337 |
476.6 |
|
18,968 |
9,908 |
91.4 |
|
Adjusted free cash flow(3) |
6,280 |
5,351 |
17.4 |
|
23,994 |
17,037 |
40.8 |
|
|
(1) |
Adjusted EBITDA is a non-IFRS measure and is defined as net income before net finance expenses, change in
fair value of investments, income taxes, depreciation, amortization and write-off, share-based compensation, restricted and
deferred share unit expenses, initial public offering ("IPO") expenses and CRTC tangible benefits and acquisition,
restructuring and other various costs. |
(2) |
Adjusted Net income is a non-IFRS measure and is defined as net income before amortization of intangible
assets, share-based compensation, change in fair value of investment, IPO expenses and CRTC tangible benefits, acquisition,
restructuring and other various costs, net of related income taxes. |
(3) |
Adjusted free cash flow is a non-IFRS measure and is defined as cash flow from operating activities less
capital expenditures for property and equipment and separately acquired intangible assets, net change in non-cash working
capital items, IPO expenses and CRTC tangible benefits and acquisition, restructuring and other various costs, net of
related income taxes. |
"We completed our first fiscal year as a public company with several accomplishments to report. Based on our fourth-quarter
results, we now have reached the $100 million run rate in revenues and the contribution of international revenues represents
close to 50%," said Eric Boyko, President, CEO and co-founder of Stingray.
"As planned, we have been active on the acquisition front with four acquisitions representing investments of $33.1 million
including contingent considerations. The acquisitions completed this year added $6.9 million to revenues and were accretive to
Adjusted EBITDA with more synergies expected in upcoming quarters and significant cross-selling opportunities to be
leveraged.
"Acquisitions are an integral part of our business model and we have identified many other future opportunities. However, it's
important to highlight the contribution of organic growth on a consolidated basis from our international market segment supported
by new products and cross-selling opportunities related to acquisitions.
"We enter the new fiscal year with great confidence considering a well-diversified business, our scale, a solid balance sheet
and many opportunities to grow through acquisitions and organically," concluded Mr. Boyko.
Fourth Quarter Results
The Corporation generated revenues of $25.7 million in the fourth quarter of 2016, an increase of 30.6% compared with revenues
of $19.6 million a year ago. The increase was primarily due to acquisitions combined with significant growth in international
markets, as well as the launch in new products. Revenues were also positively impacted by the favorable exchange rate with the US
dollar.
Recurring revenues were up 27.6% to $21.9 million in the fourth quarter of 2016 over the same period last year and decreased
slightly as a percentage of total revenues to 85%. International revenues again posted solid growth and represented 47.4% of
total revenues, up from 32.9% last year.
Music Broadcasting revenues increased 38.0% to $19.4 million, mainly due to the acquisitions of Brava, Digital Media
Distribution Pty Ltd. ("DMD") and iConcerts that occurred in Fiscal 2016. Commercial Music revenues rose 11.8% to $6.2 million,
mainly as a result of non-recurring revenues from installation and equipment sales.
Adjusted EBITDA for the fourth quarter of 2016 was $8.2 million or 32.0% of revenues, compared to $7.7 million or 39.3% of
revenues a year earlier. The 6.3% increase in Adjusted EBITDA was primarily due to the acquisitions of Brava, DMD and iConcerts,
as well as organic growth in international markets. The decrease in EBITDA margin was mainly related to administrative expenses
included in recent acquisitions from which synergies are expected, hiring of additional staff, content costs to support recent
acquisitions and additional general and administrative costs for public company obligations. We expect our margin to improve
progressively to 35.0% over the next 3 quarters with the achievement of synergies from acquisitions.
For the fourth quarter, the Corporation reported a net income of $3.2 million, or $0.06 per share (diluted), compared to $1.9
million, or $0.06 per share (diluted) for the same period in 2014. The increase was mainly due to higher income taxes recovery
related to the recognition of prior tax losses, lower finance expenses, partially offset by the change in fair value of
investment.
Adjusted Net income increased 35.6% to $7.1 million, or $0.14 per share (diluted), compared to $5.3 million, or $0.15 per
share (diluted) a year ago. The increase was primarily due to higher Adjusted EBITDA related to acquisitions combined with the
signing of new international contracts and higher income tax recovery.
Cash flow from operating activities increased to $7.7 million in the fourth quarter of 2016, versus $1.3 million a year
earlier. Adjusted free cash flow for the three-month period ending March 31, 2016, increased to $6.3 million, compared to $5.4
million for the same period a year ago.
As of March 31, 2016, the Corporation had cash and cash equivalents of $3.2 million and a revolving credit facility of $100.0
million, of which approximately $65.0 million was unused, allowing it to pursue strategic acquisitions and achieve its growth
objectives.
Year-end Results
Revenues for Fiscal 2016 increased 26.7% to a record $89.9 million compared to $71.0 million a year ago. The increase was
primarily due to acquisitions combined with growth in international markets and non-recurring revenues related to installation
and equipment sales. In addition, revenues were favourably impacted by the exchange rate between the Canadian dollar and the US
dollar.
Adjusted EBITDA increased 13.7% to $31.0 million for Fiscal 2016 from $27.3 million in Fiscal 2015. The increase was due to
the acquisitions of Brava, DMD and iConcerts, as well as organic growth in international markets.
Net income increased to a record $13.9 million ($0.29 per share diluted) in Fiscal 2016 from $6.6 million ($0.19 per share
diluted) in Fiscal 2015. As a result, Adjusted Net income rose 36.3% to $24.3 million, or $0.50 per share (diluted), compared to
$17.8 million, or $0.53 per share (diluted) a year ago.
Declaration of Dividend
On March 24, 2016, the Corporation declared a dividend of $0.035 per subordinate voting share, variable subordinate voting
share and multiple voting share that will be payable on June 15, 2016, to holders of subordinate voting shares, variable
subordinate voting shares and multiple voting shares on record as of May 31, 2016.
The Corporation's dividend policy is at the discretion of the Board of Directors and may vary depending upon, among other
things, our available cash flow, results of operations, financial condition, business growth opportunities and other factors that
the Board of Directors may deem relevant.
The dividends paid are designated as "eligible" dividends for the purposes of the Income Tax Act (Canada) and any
corresponding provisions of provincial and territorial tax legislation.
Additional Business Highlights
On February 24, 2016, the Corporation announced that it had acquired Nümedia, a company that counts Cogeco Data Services (a
subsidiary of Cogeco Communications Inc.) as one of its minority shareholders. Nümedia provides intelligent media solutions to
its clients by enabling in-venue music, experiences, communication, engagement, and activation. Stingray's decision to acquire
Nümedia was based in part on its impressive and varied client list. The acquisition creates significant operational synergies
with Stingray Business, which currently operates in over 74,000 locations across Canada, amongst them ALDO shoes, TD Canada
Trust, A&W restaurants, Sports Experts, Sobeys and Canadian Tire. The transaction was valued at $2 million.
On February 29, 2016, the Corporation announced a strategic agreement with du. As a result of the agreement,
Stingray Music and Stingray Concerts will now be available to du home customers across the UAE. This deal marks Stingray's entry
into the UAE market.
On April 18, 2016, the Corporation announced that it was selected through a competitive bidding process with the
Liquor Control Board of Ontario (LCBO) and has signed a contract to provide custom in-store music to the more than 650 LCBO
locations. Stingray has been an LCBO vendor since 2009.
On May 2, 2016, the Corporation announced the expansion of their distribution deal with Comcast to bring thousands
of new music selections to Xfinity On Demand platforms.
On June 15, 2016, 2Connect Media BV, a wholly-owned subsidiary of the Corporation, acquired the Festival 4k television
channel, the leading Ultra HD Channel with an international customer base, for a total consideration of $3,126 (EUR2,174)
including contingent consideration. Pay-TV providers carrying the channel include VOO in Belgium, Free in France, and Vodafone in
Spain.
Conference Call
The Corporation will hold a conference call to discuss these results on Thursday, June 16, 2016, at 10:00 AM (ET). Interested
parties can join the call by dialing 647-788-4922 (Toronto) or 1-877-223-4471 (toll free). If you are unable to call at this
time, you may access a tape recording of the conference call by dialing 416-621-4642 (Toronto) or 1-800-585-8367 (toll free)
followed by access code: 7356228. This tape recording will be available until July 14, 2016.
About Stingray
Stingray (TSX:RAY.A)(TSX:RAY.B) is a leading business-to-business multi-platform music and in-store media solutions provider
operating on a global scale, reaching an estimated 400 million Pay-TV subscribers (or households) in 152 countries. Geared
towards individuals and businesses alike, Stingray's products include the following leading digital music and video services:
Stingray Music, Stingray Concerts, Stingray Brava, Stingray Djazz, Stingray Music Videos, Stingray Lite TV, Stingray Ambiance,
Stingray Karaoke and iConcerts. Stingray also offers various business solutions, including music and digital display-based
solutions, through its Stingray Business division. Stingray is headquartered in Montreal and currently has close to 300 employees
worldwide, including in the United States, the United Kingdom, the Netherlands, Switzerland, France, Israel, Australia and South
Korea. Stingray was recognized in 2013 and 2014 as a finalist in the Top 50 of Deloitte's Technology Fast 50™ list, and figures
amongst PROFIT magazine's fastest-growing Canadian companies. In 2016, Stingray was awarded best IR for an IPO at the IR Magazine
Awards - Canada. For more information, please visit www.stingray.com.
Forward-Looking Information
This news release contains "forward-looking information" within the meaning of applicable Canadian securities
legislation. Such forward-looking information includes information with respect to Stingray's goals, beliefs, plans,
expectations, anticipations, estimates and intentions. Forward-looking information is identified by the use of terms and phrases
such as "may", "would", "should", "could", "expect", "intend", "estimate", "anticipate", "plan", "foresee", "believe", and
"continue", or the negative of these terms and similar terminology, including references to assumptions. Please note, however,
that not all forward-looking information contains these terms and phrases. Forward-looking information is based upon a number of
assumptions and is subject to a number of risks and uncertainties, many of which are beyond Stingray's control. These risks and
uncertainties could cause actual results to differ materially from those that are disclosed in or implied by such forward-looking
information. These risks and uncertainties include, but are not limited to, the risk factors identified in Stingray's prospectus
dated May 26, 2015, which is available on SEDAR at www.sedar.com.
Consequently, all of the forward-looking information contained herein is qualified by the foregoing cautionary statements, and
there can be no guarantee that the results or developments that Stingray anticipates will be realized or, even if substantially
realized, that they will have the expected consequences or effects on Stingray's business, financial condition or results of
operation. Unless otherwise noted or the context otherwise indicates, the forward-looking information contained herein is
provided as of the date hereof, and Stingray does not undertake to update or amend such forward-looking information whether as a
result of new information, future events or otherwise, except as may be required by applicable law.
Non-IFRS Measures
The Corporation believes that Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net income, Adjusted Net income
per share, Adjusted free cash flow, Net debt including and excluding contingent considerations and Net debt to Adjusted EBITDA
are important measures in evaluating our performance. Each of these non-IFRS financial measures is not an earnings or cash flow
measure recognized by IFRS and does not have a standardized meaning prescribed by IFRS. Our method of calculating such financial
measures may differ from the methods used by other issuers and, accordingly, our definition of these non-IFRS financial measures
may not be comparable to similar measures presented by other issuers. Investors are cautioned that non-IFRS financial measures
should not be construed as an alternative to net income determined in accordance with IFRS as indicators of our performance or to
cash flows from operating activities as measures of liquidity and cash flows.
Adjusted EBITDA and Adjusted Net income reconciliation to Net income
|
Quarters ended March 31 |
|
Years ended March 31 |
|
(in thousands of Canadian dollars) |
2016
Q4 2016 |
|
2015
Q4 2015 |
|
2016
Fiscal 2016 |
|
2015
Fiscal 2015 |
|
Net income |
3,247 |
|
1,923 |
|
13,881 |
|
6,607 |
|
Net finance expenses (income) |
836 |
|
942 |
|
(418 |
) |
4,686 |
|
Change in fair value of investments |
1,113 |
|
(451 |
) |
(7,345 |
) |
(1,801 |
) |
Income taxes |
(1,428 |
) |
(241 |
) |
275 |
|
(837 |
) |
Depreciation of property and equipment and write-off |
594 |
|
597 |
|
2,146 |
|
2,125 |
|
Amortization of intangibles |
2,624 |
|
3,653 |
|
12,882 |
|
12,854 |
|
Stock-based compensation |
390 |
|
376 |
|
1,351 |
|
800 |
|
Restricted and deferred share unit expenses |
319 |
|
221 |
|
963 |
|
221 |
|
IPO expenses and CRTC tangible benefits |
21 |
|
- |
|
5,821 |
|
- |
|
Acquisition, restructuring and other various costs |
503 |
|
711 |
|
1,448 |
|
2,620 |
|
Adjusted EBITDA |
8,219 |
|
7,731 |
|
31,004 |
|
27,275 |
|
Net finance expenses (income) |
(836 |
) |
(942 |
) |
418 |
|
(4,686 |
) |
Income taxes |
1,428 |
|
241 |
|
(275 |
) |
837 |
|
Depreciation of property and equipment and write-off |
(594 |
) |
(597 |
) |
(2,146 |
) |
(2,125 |
) |
Income taxes related to change in fair value of investment, share-based compensation, restricted and
deferred share unit expenses, amortization of intangible assets, IPO expenses and CRTC tangible benefits and acquisition,
restructuring and other various costs |
(1,082 |
) |
(1,173 |
) |
(4,692 |
) |
(3,467 |
) |
Adjusted Net income |
7,135 |
|
5,260 |
|
24,309 |
|
17,834 |
|
|
|
|
|
|
|
|
|
|
Adjusted free cash flow reconciliation to Cash flow from operating activities
|
Quarters ended March 31 |
|
Years ended March 31 |
|
(in thousands of Canadian dollars) |
2016
Q4 2016 |
|
2015
Q4 2015 |
|
2016
Q4 2016 |
|
2015
Q4 2015 |
|
Cash flow from operating activities |
7,709 |
|
1,337 |
|
18,968 |
|
9,908 |
|
Add / Less : |
|
|
|
|
|
|
|
|
Capital expenditures |
(1,100 |
) |
(528 |
) |
(3,429 |
) |
(2,439 |
) |
Net change in non-cash operating working capital items |
(718 |
) |
4,164 |
|
1,576 |
|
8,018 |
|
Acquisition, restructuring and other various costs(1) |
368 |
|
378 |
|
1,058 |
|
1,550 |
|
IPO expenses and CRTC tangible benefits(1) |
21 |
|
- |
|
5,821 |
|
- |
|
Adjusted free cash flow |
6,280 |
|
5,351 |
|
23,994 |
|
17,037 |
|
Note to readers: Consolidated financial statements and Management's Discussion & Analysis of Operating
Results and Financial Position are available on the Corporation's website at www.stingray.com and on SEDAR at www.sedar.com.