TORONTO, Sept. 28, 2016 /CNW/ - Sirius XM Canada Holdings Inc.
("SiriusXM Canada" or the "Company") (TSX: XSR), parent of Sirius XM Canada Inc., today released the financial results for its
fourth quarter fiscal 2016 ("Q4 FY2016") and the audited consolidated financial statements for fiscal year ended
August 31, 2016 ("FY2016") prepared in accordance with International Financial Reporting Standards (IFRS). A summary of the
IFRS financial results for Q4 and FY2016 is attached. All results are reported in thousands of Canadian dollars, except for
subscribers and per share amounts, unless otherwise stated.
Q4 and FY2016 Financial and Operating Metrics
The figures below include certain non-GAAP measures and industry metrics. These figures are subject to the qualification and
assumptions set out in the Company's notes to such results.
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|
|
|
|
|
Financial 1
|
Q4 FY2016
|
Q4 FY2015
|
% Change6
|
FY2016
|
FY2015
|
% Change6
|
|
Aug 31, 2016
|
Aug 31, 2015
|
|
Aug 31, 2016
|
Aug 31, 2015
|
|
|
|
|
|
|
|
|
|
Revenue
|
87,408
|
83,709
|
4.4%
|
341,327
|
325,874
|
4.7%
|
|
Adjusted EBITDA 2
|
15,241
|
12,792
|
19.1%
|
84,362
|
79,214
|
6.5%
|
|
Net Income before non-recurring adjustments 3
|
4,184
|
2,406
|
73.9%
|
33,843
|
28,239
|
19.8%
|
|
|
|
|
|
|
|
|
Net Income (loss)
|
4,184
|
2,406
|
73.9%
|
49,730
|
(6,748)
|
837.0%
|
|
|
|
|
|
|
|
|
Free cash flow 4
|
17,991
|
15,817
|
13.7%
|
54,477
|
55,157
|
(1.2)%
|
|
|
|
|
|
|
|
|
Operating
|
|
|
|
|
|
|
|
Self-Pay subscribers
|
2,007
|
1,925
|
4.3%
|
2,007
|
1,925
|
4.3%
|
|
Total subscribers
|
2,831
|
2,726
|
3.9%
|
2,831
|
2,726
|
3.9%
|
|
Self-Pay ARPU 5
|
$12.67
|
$12.69
|
(0.2)%
|
$12.61
|
$12.61
|
-%
|
|
Subscriber Acquisition Cost (SAC)
|
$40
|
$40
|
-%
|
$40
|
$39
|
2.6%
|
|
1 All figures in the table above are in thousands except
Self-Pay ARPU and SAC.
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|
2 Adjusted EBITDA is a non-GAAP measure. A
reconciliation of income (loss) before taxes to both EBITDA and Adjusted EBITDA is provided below.
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|
3 Non-recurring adjustment in FY2016 include a
withholding tax recovery of $15.9 million. Non-recurring adjustments in FY2015 includes a $15.9 million withholding tax
expense and a $19.1 million non-cash income tax expense relating to future income taxes.
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|
4 Free cash flow is a non-GAAP measure. A reconciliation
of free cash flow is provided below.
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5 Self-Pay ARPU is derived from the total of earned
subscription revenue from Self-Pay subscribers, music royalty fee, and activation fees divided
by the monthly weighted average number of Self-Pay subscribers. Please see the Company's MD&A for a more detailed
description.
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|
6 Percentage variances/changes are calculated based on
the exact numbers, therefore, amounts may not sum as a result of rounding in certain instances.
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"We continued to deliver an unmatched listening experience in the quarter with exclusive musical content, such as The Tragically
Hip Radio takeover, and extensive sports coverage, while also helping foster Canadian talent through another year of our
Canada's Top Comic competition," said Mark Redmond, President and
CEO SiriusXM Canada. "In addition, as a result of growth in our subscriber base, we realized year-over-year improvements in revenue
and Adjusted EBITDA. In terms of our proposed recapitalization go-private transaction, we are pleased to have received two out of
the three necessary approvals - shareholder and court - and are working diligently to secure the required CRTC regulatory approval
to complete the transaction."
Q4 and FY2016 Financial Results Review
For Q4 FY2016, revenue was $87,408, up $3,699, or 4.4%, from
$83,709 in Q4 FY2015. The year-over-year improvement reflects growth in the Company's
subscriber base, partly offset by a decrease in equipment sales. Q4 FY2016 Self-Pay ARPU was relatively flat to Q4 FY2015 at
$12.67. For FY2016, revenue was $341,327, up $15,453, or 4.7%, from $325,874 for the same period in FY2015. FY2016
Self-Pay ARPU of $12.61 was in line with FY2015.
Adjusted EBITDA for Q4 FY2016 increased $2,449, or 19.1%, to $15,241
from $12,792 in Q4 FY2015. The improvement was due to revenue growth and lower marketing costs,
partly offset by higher variable revenue share and royalty costs associated with the corresponding increase in revenues. For
FY2016, Adjusted EBITDA was $84,362, up $5,148, or 6.5%, from
$79,214 for the same period in FY2015.
The Company recorded net income of $4,184 in Q4 FY2016, an increase of $1,778, or 73.9%, compared to net income of $2,406 in Q4 FY2015, which was mainly
due to higher revenues, partly offset by increased operating expenses and greater depreciation and amortization. FY2016 net income
was $49,730, up $56,478, compared to a net loss of $6,748 for the same period in FY2015. Excluding the impact of the non-recurring adjustments, net income was
$33,843 and $28,239 for FY2016 and FY2015, respectively.
SAC for Q4 FY2016 and FY2015 was flat at $40. SAC for FY2016 was $40, up from $39 in FY2015, which was due to greater new vehicle production and
sales volumes, a one-time net realizable provision for inventory purchased, and unfavourable foreign exchange rates compared to the
same period in FY2015.
The Company generated free cash flow of $17,991 in Q4 FY2016, an improvement of $2,174, or 13.7%, from $15,817 in Q4 FY2015 mainly due to an increase in cash flow
generated from operating activities partially offset by higher capital expenditures which were related to XM activation fees and
additions to the dual-band terrestrial repeater network. The Company generated free cash flow of $54,477 during FY2016, down $680, or 1.2% from $55,157 in FY2015.
At August 31, 2016, the Company had total cash of $40,379 compared to $26,128 at August 31, 2015, primarily resulting from the dividend suspension pursuant to the Company's
Recapitalization go-private transaction.
Conference Call and Webcast Details
SiriusXM Canada will hold a conference call to discuss the Company's FY 2016 Q4 and year-end results on Thursday, September 29, 2016 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
will be archived for replay until Thursday, October 6, 2016 at midnight. To access the archived
conference call, please dial 416-849-0833 or 1-855-859-2056 and enter reservation code: 82336392. A live audio webcast of the
conference call will be available here: http://bit.ly/2d3aSJa.
Please connect at least 15 minutes prior to the conference call to ensure adequate time for any software downloads that may be
required. An archived replay will be available for 90 days.
Reconciliations
The following is a reconciliation of EBITDA and Adjusted EBITDA to net income before income tax:
|
|
|
|
|
|
Adjusted EBITDA: Reconciliation
|
Q4 FY2016
|
Q4 FY2015
|
FY2016
|
FY2015
|
|
(All amounts in thousands)
|
Aug 31, 2016
|
Aug 31, 2015
|
Aug 31, 2016
|
Aug 31, 2015
|
|
|
|
|
|
|
Net income before income tax
|
4,058
|
3,564
|
60,641
|
24,416
|
|
Interest expense & income (net)
|
3,215
|
3,071
|
13,094
|
12,213
|
|
Foreign exchange (loss) gain
|
(79)
|
280
|
59
|
331
|
|
Depreciation and amortization
|
6,005
|
5,514
|
22,662
|
22,936
|
|
EBITDA
|
13,199
|
12,429
|
96,456
|
59,896
|
|
Withholding tax (recovery) expense
|
—
|
—
|
(15,887)
|
15,887
|
|
Stock-based compensation
|
458
|
363
|
(78)
|
3,427
|
|
Third-party advisory costs
|
1,584
|
—
|
3,871
|
—
|
|
Fair value adjustments 7
|
—
|
—
|
—
|
4
|
|
Adjusted EBITDA
|
15,241
|
12,792
|
84,362
|
79,214
|
|
|
|
|
|
|
7 Fair value adjustment relates to a reduction in revenue due
to the valuation of deferred revenue as per purchase price accounting
|
|
|
|
|
|
|
Free Cash Flow: Reconciliation
|
Q4 FY2016
|
Q4 FY2015
|
FY2016
|
FY2015
|
|
(All amounts in thousands)
|
Aug 31, 2016
|
Aug 31, 2015
|
Aug 31, 2016
|
Aug 31, 2015
|
|
|
|
|
|
|
Cash flow provided by operating activities
|
20,812
|
18,343
|
71,837
|
70,955
|
|
Purchase of property and equipment
|
(629)
|
(468)
|
(3,834)
|
(1,845)
|
|
Purchase of intangible assets
|
(2,192)
|
(1,982)
|
(13,526)
|
(13,098)
|
|
Prepayment for property and equipment
|
—
|
(76)
|
—
|
(855)
|
|
Free Cash Flow
|
17,991
|
15,817
|
54,477
|
55,157
|
For a complete definition of non-GAAP measures, and for additional details on the Company's FY2016 results,
please see the Company's MD&A filed September 28, 2016 which is incorporated herein by reference.
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 financial statements for FY2016.
Forward-Looking Statements
Certain statements included above are 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 the completion of
the Company's Recapitalization go-private transaction, the payment of dividends in the future, and future performance and financial
results. Although SiriusXM Canada believes that the expectations reflected in such forward-looking statements are reasonable,
forward-looking statements, by their very nature, are subject to inherent risks and uncertainties and are based on assumptions,
both general and specific, which give rise to the possibility that actual results or events could differ materially from our
expectations expressed in or implied by such forward-looking statements. As a result, we cannot guarantee that any forward-looking
statement will materialize and we caution you against relying on any of these forward-looking statements. 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
Sirius XM Canada Holdings Inc.'s filings with the Canadian securities regulators, available at www.sedar.com.
About SiriusXM Canada
Sirius XM
Canada Holdings Inc. (TSX: XSR) operates as SiriusXM Canada. SiriusXM Canada, with more than 2.8 million
subscribers, is the country's leading audio entertainment company and broadcasts more than 130 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,
entertainment and major sports brands including the NHL, NFL, NBA, MLB, NASCAR, CNN, CBC, FOX, BBC, Howard
Stern, Disney, Comedy Central and more.
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 www.siriusxm.ca and on Apple and Android-powered mobile devices.
SiriusXM Canada has partnerships with every major automaker and its radio products are available at more than 2,500
retail locations nationwide. To find out more about SiriusXM Canada, visit our website at www.siriusxm.ca.
SiriusXM Canada has been designated one of Canada's 50 Best Managed Companies seven years
in a row and is currently a Platinum Club Member, in addition to 2013, 2014 and 2015 rankings in PROFIT
500's list of Canada's Fastest Growing Companies.
Join SiriusXM Canada on Facebook at facebook.com/siriusxmcanada, on Twitter at twitter.com/siriusxmcanada and on Youtube at youtube.com/siriusxmcanada.
|
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
|
|
|
At
|
|
August 31,
|
August 31,
|
|
(All amounts in thousands)
|
|
2016
|
2015
|
|
|
|
|
|
ASSETS
|
|
|
|
|
Current assets
|
|
|
|
|
Cash
|
|
40,379
|
26,128
|
|
Accounts receivable
|
|
9,217
|
9,436
|
|
Prepaid expenses
|
|
1,318
|
5,642
|
|
Inventory
|
|
2,339
|
35
|
|
Total current assets
|
|
53,253
|
41,241
|
|
Property and equipment
|
|
10,678
|
4,285
|
|
Intangible assets
|
|
135,483
|
131,410
|
|
Deferred tax assets
|
|
8,517
|
19,428
|
|
Goodwill
|
|
96,733
|
96,733
|
|
Total assets
|
|
304,664
|
293,097
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS' DEFICIENCY
|
|
|
|
|
Current liabilities
|
|
|
|
|
Trade and other payables
|
|
45,120
|
52,545
|
|
Due to related parties
|
|
16,557
|
15,950
|
|
Interest payable
|
|
3,966
|
3,966
|
|
Deferred revenue
|
|
156,929
|
153,076
|
|
Provisions
|
|
930
|
1,078
|
|
Total current liabilities
|
|
223,502
|
226,615
|
|
Deferred revenue
|
|
9,086
|
12,033
|
|
Other long-term liabilities
|
|
9,537
|
651
|
|
Due to related parties
|
|
1,208
|
1,208
|
|
Long-term debt
|
|
196,644
|
196,036
|
|
Total liabilities
|
|
439,977
|
436,543
|
|
|
|
|
|
Shareholders' deficiency
|
|
|
|
|
Share capital
|
|
180,280
|
178,479
|
|
Contributed surplus
|
|
5,943
|
8,817
|
|
Accumulated deficit
|
|
(321,536)
|
(330,742)
|
|
Total shareholders' deficiency
|
|
(135,313)
|
(143,446)
|
|
Total liabilities and shareholders' deficiency
|
|
304,664
|
293,097
|
|
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' DEFICIENCY
|
|
|
|
|
|
|
|
|
|
Total
|
|
For the year ended
|
Share
|
Contributed
|
Accumulated
|
Shareholders'
|
|
(All amounts in thousands)
|
Capital
|
Surplus
|
Deficit
|
Deficiency
|
|
|
|
|
|
|
At September 1, 2014
|
176,862
|
6,067
|
(270,157)
|
(87,228)
|
|
Net loss and comprehensive loss
|
—
|
—
|
(6,748)
|
(6,748)
|
|
Stock-based compensation
|
—
|
3,427
|
—
|
3,427
|
|
Dividends
|
—
|
—
|
(53,837)
|
(53,837)
|
|
Stock options exercised
|
1,617
|
(677)
|
—
|
940
|
|
At August 31, 2015
|
178,479
|
8,817
|
(330,742)
|
(143,446)
|
|
|
|
|
|
|
At September 1, 2015
|
178,479
|
8,817
|
(330,742)
|
(143,446)
|
|
Net income and comprehensive income
|
—
|
—
|
49,730
|
49,730
|
|
Stock-based compensation
|
—
|
(976)
|
—
|
(976)
|
|
Dividends
|
—
|
—
|
(40,524)
|
(40,524)
|
|
Restricted Stock Units ("RSU") and
Performance Stock Units ("PSU") awards,
net equity settlement
|
1,286
|
(1,681)
|
—
|
(395)
|
|
Stock options exercised
|
515
|
(217)
|
—
|
298
|
|
At August 31, 2016
|
180,280
|
5,943
|
(321,536)
|
(135,313)
|
|
CONSOLIDATED STATEMENTS OF INCOME (LOSS)
|
|
|
|
|
|
|
Three months ended
|
Year ended
|
|
August 31,
|
August 31,
|
August 31,
|
August 31,
|
|
(All amounts in thousands except per share amounts)
|
2016
|
2015
|
2016
|
2015
|
|
|
|
|
|
|
Revenue
|
87,408
|
83,709
|
341,327
|
325,874
|
|
|
|
|
|
|
Operating expenses
|
|
|
|
|
|
Operating costs
|
74,209
|
71,280
|
260,758
|
250,091
|
|
Depreciation and amortization
|
6,005
|
5,514
|
22,662
|
22,936
|
|
Operating income
|
7,194
|
6,915
|
57,907
|
52,847
|
|
|
|
|
|
|
Withholding tax recovery (expense)
|
—
|
—
|
15,887
|
(15,887)
|
|
|
|
|
|
|
Interest income
|
58
|
59
|
234
|
288
|
|
Interest expense
|
(3,273)
|
(3,130)
|
(13,328)
|
(12,501)
|
|
Foreign exchange (gain) loss
|
79
|
(280)
|
(59)
|
(331)
|
|
Finance costs, net
|
(3,136)
|
(3,351)
|
(13,153)
|
(12,544)
|
|
|
|
|
|
|
Net income and comprehensive income before
income tax
|
4,058
|
3,564
|
60,641
|
24,416
|
|
Income tax expense
|
126
|
(1,158)
|
(10,911)
|
(31,164)
|
|
Net income (loss) and comprehensive income (loss)
|
4,184
|
2,406
|
49,730
|
(6,748)
|
|
|
|
|
|
|
Earnings (loss) per share - basic and diluted
|
0.04
|
0.02
|
0.39
|
(0.05)
|
|
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
|
|
Three months ended
|
Year ended
|
|
(All amounts in thousands)
|
August 31,
2016
|
August 31,
2015
|
August 31,
2016
|
August 31,
2015
|
|
Cash provided by (used in)
|
|
|
|
|
|
|
|
|
|
|
OPERATING ACTIVITIES
|
|
|
|
|
|
Net income (loss) for the period
|
4,184
|
2,406
|
49,730
|
(6,748)
|
|
|
|
|
|
|
Add (deduct) items not involving cash:
|
|
|
|
|
|
Amortization of intangible assets
|
5,669
|
4,995
|
21,366
|
21,013
|
|
Depreciation of property and equipment
|
336
|
518
|
1,296
|
1,923
|
|
Income tax expense
|
(126)
|
1,158
|
10,911
|
31,164
|
|
Stock-based compensation
|
458
|
363
|
(78)
|
3,427
|
|
Tax paid in lieu of shares issued for stock-based
compensation
|
—
|
—
|
(407)
|
—
|
|
Accrued interest
|
2,813
|
2,813
|
—
|
—
|
|
Interest accretion
|
155
|
146
|
608
|
572
|
|
Foreign exchange (gain) loss
|
(3)
|
308
|
(27)
|
583
|
|
Net change in non-cash working capital and deferred
revenue related to operations
|
7,326
|
5,636
|
(11,562)
|
19,021
|
|
|
|
|
|
|
Cash provided by operating activities
|
20,812
|
18,343
|
71,837
|
70,955
|
|
|
|
|
|
|
INVESTING ACTIVITIES
|
|
|
|
|
|
Purchase of property and equipment
|
(629)
|
(468)
|
(3,834)
|
(1,845)
|
|
Purchase of intangible assets
|
(2,192)
|
(1,982)
|
(13,526)
|
(13,098)
|
|
Prepayment for property and equipment
|
—
|
(76)
|
—
|
(855)
|
|
Cash used in investing activities
|
(2,821)
|
(2,526)
|
(17,360)
|
(15,798)
|
|
|
|
|
|
|
FINANCING ACTIVITIES
|
|
|
|
|
|
Payment of dividends
|
—
|
(13,475)
|
(40,524)
|
(53,837)
|
|
Proceeds from exercise of stock options
|
36
|
32
|
298
|
940
|
|
Cash used in financing activities
|
36
|
(13,443)
|
(40,226)
|
(52,897)
|
|
|
|
|
|
|
Net increase in cash during the period
|
18,027
|
2,374
|
14,251
|
2,260
|
|
Cash balance, beginning of period
|
22,352
|
23,754
|
26,128
|
23,868
|
|
Cash balance, end of period
|
40,379
|
26,128
|
40,379
|
26,128
|
SOURCE SiriusXM Canada
