November 14, 2013 04:10 PM

First Full Year of Positive Net Income

  • Record annual Revenue of $288.9 million, up 11.3% year-over-year
  • Annual Adjusted EBITDA** of $68.7 million, up 47.6% year-over-year
  • Annual free cash flow of $49.6 million, up 35.4% year-over-year
  • Paid $53.7 million to shareholders in dividends during the year
  • Total Subscribers increased to 2.4 million; year-over-year net additions of 220,900

TORONTO, Nov. 14, 2013 /CNW/ - Sirius XM Canada 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, 2013 (FY2013) and unaudited financial results for the quarter ended August 31, 2013 (Q4 FY2013) prepared in accordance with International Financial Reporting Standards (IFRS). A summary of IFRS financial results for FY2013 and Q4 FY2013 is attached1. All results are reported in Canadian dollars unless otherwise stated.

FY2013 Annual Financial Highlights

  • Revenue grew 11.3% to $288.9 million from $259.6 million in FY2012
  • Adjusted EBITDA increased 47.6% to $68.7 million from $46.6 million in FY2012
  • Net Income increased by $16.4 million to $12.2 million from a net loss of $4.2 in FY2012
  • Free cash flow increased $13.0 million to $49.6 million from $36.6 million in FY2012
  • Paid $53.7 million in dividends to shareholders during the year
  • Self-Paying Subscribers increased 9.0% to 1.7 million from 1.6 million at August 31, 2012

Q4 FY2013 Financial Highlights

  • Revenue grew 11.2% to $75.7 million from $68.1 million in Q4 2012
  • Adjusted EBITDA increased 35.6% to $16.6 million from $12.2 million in Q4 2012
  • Net Income decreased 33.3% to $4.1 million from a net income of $6.1 in Q4 2012
  • Free cash flow increased 14.0% to $9.7 million, from $8.5 million in Q4 2012

"2013 was Sirius XM Canada's second year as a combined entity. In all respects, it was a successful year in which we met or exceeded the key operational and financial goals we set," said Mark Redmond, President and CEO, SiriusXM Canada. "At the core of our recent success has been our ability to grow our subscriber base. We've added more than 444,000 net total subscribers since the merger, and this in turn has driven our strong financial performance and enabled us in fiscal 2013 to begin to return capital to shareholders in the form of dividends."

"Looking forward, we are excited by the growth opportunities in front of us," continued Mr. Redmond. "Our strategic priorities are to grow our subscriber base, retain those subscribers, deliver unrivaled content and leverage SiriusXM's technology innovation to launch new products and services. To deliver on these objectives, we will expand our footprint with the OEM product lines; pursue opportunities in the pre-owned vehicle market; continue to give our customer more control over more content, which they can enjoy in more places; and, remain at the forefront of new technologies, helping to drive innovation in terms of the features and content available to owners of the emerging "connected car".

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.

__________________________
1 For a complete set of financial results including the accompanying notes please refer to the Company's filings on www.sedar.com

Financial * Q4 FY2013 Q4 FY2012 FY2013 FY2012
(ended Aug 31, 2013) (ended Aug 31, 2012) (ended Aug 31, 2013) (ended Aug 31, 2012)
(Unaudited) (Unaudited) (Audited) (Audited)
Total Revenue $75,739 $68,119 $288,901 $259,620
Adjusted EBITDA** $16,570 $12,220 $68,722 $46,562
Net Income (Loss) $4,078 $6,117 $12,191 ($4,179)
Operating*
Self-Paying Subscribers 1,727 1,584 1,727 1,584
Total Subscribers 2,427 2,206 2,427 2,206
ARPU $11.72 $11.65 $11.64 $11.60
Subscriber Acquisition Cost (SAC) $40 $46 $44 $49
Cost Per Gross Addition (CPGA) $76 $76 $73 $75
* All figures in the table above are in thousands except, ARPU, SAC and CPGA
** Adjusted EBITDA is a non-GAAP measure. A reconciliation of operating income to both EBITDA and Adjusted EBITDA is provided below.

"Strong EBITDA growth, coupled with a high free cash flow conversion rate led to a significant increase in free cash flow, which allowed us to return $53.7 million in dividends to our shareholders during the year," said Michael Washinushi, CFO SiriusXM Canada. "With modest capital expenditure requirements and a growing recurring revenue stream, we believe our dividend is sustainable with the potential for further expansion as the business grows."

FY2013 Annual and Q4 FY2013 Results Financial Review

For FY2013, revenue was $288.9 million, up $29.3 million, or 11.3%, from $259.6 million in 2012, as a result of the growth in the Company's revenue-generating subscriber base and a slight increase in ARPU. Q4 FY2013 revenue was $75.7 million, up $7.6 million, or 11.2%, from $68.1 million for the same period in 2012.

FY2013 Adjusted EBITDA improved to $68.7 million, representing a 47.6% increase, or $22.1 million improvement, from Adjusted EBITDA of $46.6 million in 2012. The year-over-year increase was a result of the Company's top-line growth combined with a decrease in administrative and IT expenses, which was offset, in part, by a higher cost of revenue and marketing costs. Adjusted EBITDA for Q4 FY2013 was $16.6 million, up 35.6%, or $4.4 million, from $12.2 million for the same period in 2012.

SAC was $44 in FY2013 down from $49 in 2012. SAC forQ4 FY2013 was$40, down from $46 for the same period in 2012. The decrease for the year and the quarter was due to lower subsidies and distribution costs and higher gross additions from winback activities.

CPGA was $73 in FY2013 down from $75 in 2012 as an increase in marketing costs was more than offset by an increase in gross additions from winback activities and the decrease in subsidy costs. CPGA for Q4 FY2012 remained unchanged at $76 compared to the same period in 2012 as the effect of higher marketing costs was offset by higher year over year gross additions from winback activities and lower subsidy costs.

In FY2013, SiriusXM Canada generated $60.3 million in cash from operations, used cash of $15.7 million in investing activities, including purchase of short term investments of $5.3 million, and used $51.5 million of cash in financing activities, including $53.7 million of dividend payments. The Company generated $49.6 million in free cash flow in FY2013. In Q4 FY2013, the Company generated $14.8 million in cash from operations, used $5.0 million of cash in investing activities, and used $12.1 million of cash in financing activities. The Company generated $9.7 million in free cash flow in Q4 FY2013.

As at August 31, 2013, SiriusXM Canada had total cash and cash equivalents and short term investments of $49.2 million, down from $51.5 million as at May 31, 2013 and $51.0 million as at August 31, 2012.

Conference Call and Webcast Details

SiriusXM Canada will hold a conference call to discuss the Company's FY2013 annual and Q4 results on Thursday, November 14, 2013 at 5.00 p.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 21, 2013 at midnight. To access the archived conference call, please dial 416-849-0833, or 1-855-859-2056 and enter the reservation code 92906022. A live audio webcast of the conference call will be available at http://www.siriusxm.ca and www.newswire.ca. 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 www.newswire.ca.

Reconciliations

The following is a reconciliation of EBITDA and Adjusted EBITDA to Operating Income.

(In $000's) Q4 FY2013 Q4 FY2012 FY2013 FY2012
(Unaudited) (Unaudited) (Audited) (Audited)
Operating income (loss)      7,071       3,013     30,675       2,844
Depreciation & Amortization       9,065       8,699     35,576     39,689
EBITDA     16,136     11,712     66,250     42,533
Stock based compensation         399         333       2,257       1,493
Integration, severance and merger costs           -               2           -         1,383
Fair value adjustments*           35         173         215       1,152
Adjusted EBITDA     16,570     12,220     68,722     46,562
* Fair value adjustment relates to reduction in revenue due to valuation of deferred revenue as per 
purchase price accounting

Please see the Company's Management Discussion & Analysis filed November 14, 2013 for more details on the Company's Q4 and 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 audited consolidated statement of operations and comprehensive income. Please see the Company's Management Discussion & Analysis filed November 14, 2013 for complete definition of non-GAAP measures.

Forward-Looking Statements
Certain 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 the payment of dividends in the future and future performance. 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, including with respect to the ability of the Company to pay dividends in the future. 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 over 2.4 million subscribers, 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 every major sport 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 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 3,000 retail locations nationwide. To find out more about SiriusXM Canada (TSX: XSR), visit our website at www.siriusxm.ca.

Consolidated Financial Statements

Sirius XM Canada Holdings Inc.
August 31, 2013 and 2012

CONSOLIDATED BALANCE SHEETS
At August 31, August 31,
(Canadian dollars) 2013 2012
ASSETS
Current assets
Cash and cash equivalents 44,078,584 51,034,749
Short-term investments 5,157,798 -
Accounts receivable 13,359,446 12,133,138
Prepaid expenses 6,778,736   3,361,448
Inventory 234,349   324,316
Total current assets 69,608,913 66,853,651
Long-term prepaid expenses 100,157 79,410
Property and equipment 5,979,911   7,617,399
Intangible assets 152,217,165 175,986,331
Deferred tax assets 54,483,616 59,858,394
Goodwill 96,732,525 96,732,525
Total assets 379,122,287 407,127,710
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Trade and other payables 47,145,257 39,085,800
Due to related parties 9,620,750   6,775,601
Interest payable 2,704,449   2,704,449
Current portion of deferred revenue 144,885,091 137,554,399
Provisions 1,327,974   1,285,587
Total current liabilities 205,683,521 187,405,836
Deferred revenue 17,105,210 21,019,320
Other long-term liabilities 1,669,229   6,902,537
Due to related parties 2,390,608   1,208,332
Long-term debt 143,707,194 144,992,819
Provisions 323,112   344,112
Total liabilities 370,878,874 361,872,956
Shareholders' equity
Share capital 151,794,596 148,393,493
Contributed surplus 6,161,440   5,057,501
Accumulated deficit (149,712,623) (108,196,240)
Total shareholders' equity 8,243,413 45,254,754
Total liabilities and shareholders' equity 379,122,287 407,127,710

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
Total
For the year ended August 31  Share Contributed Accumulated Shareholders'
(Canadian dollars) Capital Surplus deficit Equity
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 - 1,493,400
Stock options exercised 1,224,063 (759,931) - 464,132
Balance, August 31, 2012 148,393,493 5,057,501 (108,196,240) 45,254,754
Balance, September 1, 2012 148,393,493 5,057,501 (108,196,240) 45,254,754
Net income for the year 12,190,542 12,190,542
Stock-based compensation - 2,257,295 - 2,257,295
Dividends - - (53,706,925) (53,706,925)
Stock options exercised 3,401,103 (1,153,356) - 2,247,747
Balance, August 31, 2013 151,794,596 6,161,440 (149,712,623) 8,243,413
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
For the year ended August 31
(Canadian dollars) 		2013 2012
Revenue 288,900,782 259,619,500
Operating expenses
  Operating costs 222,650,627 215,703,343
  Integration, severance and merger costs -   1,383,105
  Depreciation and amortization 35,575,596 39,689,053
Operating income 30,674,559   2,843,999
Finance costs, net
  Interest income 686,132 360,906
  Interest expense (15,410,960) (16,699,532)
  Foreign exchange loss (675,789) (210,372)
  Gain on revaluation of derivative 2,291,378   1,213,473
Finance costs, net (13,109,239) (15,335,525)
Net income (loss) before income tax 17,565,320 (12,491,526)
Income tax (expense) recovery (5,374,778)   8,312,710
Net income (loss) and comprehensive income (loss) 12,190,542 (4,178,816)
Basic and diluted earnings (loss) per share 0.10   (0.03)
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the year ended August 31
(Canadian dollars) 		2013 2012
Cash provided by (used in)
OPERATING ACTIVITIES
Net income (loss) for the year 12,190,542 (4,178,816)
Add(deduct) items not involving cash
  Amortization of intangible assets 33,167,880   36,899,668
  Depreciation of property and equipment 2,407,716   2,789,385
  Loss on disposal of property and equipment 11,109 -
  Deferred tax recovery 5,374,778 (8,312,710)
  Stock-based compensation 2,257,295   1,493,400
  Accrued interest -   (5,088)
  Interest accretion 954,375   950,583
  Revaluation of derivatives (2,291,378) (1,213,473)
  Foreign exchange losses 769,540 3,010
Net change in non-cash working capital and deferred revenue
related to operations 		5,409,419   12,649,125
Cash provided by operating activities 60,251,276   41,075,084
INVESTING ACTIVITIES
Purchase of property and equipment (753,788) (728,425)
Purchase of intangible assets (7,624,829) (3,700,491)
Prepayment of property and equipment (2,240,000) -
Purchase of short-term investments (5,306,295) -
Interest received on short-term investments 176,649 -
Cash (used in) investing activities (15,748,263) (4,428,916)
FINANCING ACTIVITIES
Payment of dividends (53,706,925) -
Proceeds from exercise of stock options  2,247,747   464,132
Repayments of debt - (917,700)
Payment of related party promissory notes - (11,173,290)
Cash (used in) financing activities (51,459,178) (11,626,858)
Net (decrease) increase in cash and cash equivalents
during the year 		(6,956,165)   25,019,310
Cash and cash equivalents, beginning of year 51,034,749   26,015,439
Cash and cash equivalents, end of year 44,078,584   51,034,749

SOURCE Sirius XM Canada Holdings Inc.

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