SiriusXM Canada Delivers Continued Growth with Strong Fiscal 2012 Year End and Fourth Quarter Results

• Company achieves $20 million in annualized cost synergies
• Total Subscribers of 2.2 million; year-over-year net additions of 223,100
• Record annual revenue of $259.6 million
• Adjusted annual EBITDA** of $46.6 million, up 75.6% year-over-year
• Free cash flow of $36.6 million, up 751% year-over-year

TORONTO, Nov. 14, 2012 /CNW/ - Canadian Satellite Radio 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, 2012 (FY2012) and unaudited financial results for the quarter ended August 31, 2012 (Q4 FY2012) prepared in accordance with International Financial Reporting Standards (IFRS). A summary of IFRS financial results for FY2012 and Q4 FY2012 is attached¹. To provide a basis of comparison of the performance of the combined entity formed through the business combination of Sirius Canada and XM Canada, the Company has also provided unaudited combined financial information (referred to as "Combined Information") for the comparative year and quarter ended August 31, 2011. All results are reported in Canadian dollars unless otherwise stated.

FY2012 Annual Financial Highlights Compared to Combined Information for 2011

• Adjusted EBITDA increased 75.6% to $46.6 million from $26.5 million in 2011
• Self-Paying Subscribers increased 13.8% to 1.6 million from 1.4 million at August 31, 2011
• Revenue grew 8.9% to $259.6 million from $238.4 million for 2011
• Free cash flow increased $32.3 million to $36.6 million from $4.3 million for 2011
• Reported cash and cash equivalents of $51.0 million at August 31, 2012

Q4 FY2012 Financial Highlights Compared to Combined Information for the Comparative Period in 2011

• Adjusted EBITDA increased 10.5% to $12.2 million from $11.1 million in Q4 2011
• Revenue grew 11.5% to $68.1 million from $61.1 million in Q4 2011
• Free cash flow increased $9.3 million to $8.5 million, from $(0.8) million in Q4 2011

"In fiscal 2012, we delivered significant growth in all of our key metrics and further solidified our position as a leader in the Canadian audio entertainment marketplace, with more than 2.2 million subscribers at year end,"said Mark Redmond, President and CEO, SiriusXM Canada."Through a combination of double-digit subscriber growth and effective cost management, we expanded our Adjusted EBITDA margin and drove strong free cash flow. We are extremely pleased with our first-year's performance as a merged entity."

"Looking to fiscal 2013, we are confident our growth will continue as we work to increase in-vehicle penetration rates and better leverage opportunities in the pre-owned car market," Mr. Redmond continued. "In addition, with the recent launch of SiriusXM 2.0 and Best-Of programming, subscribers are now able to access premium content from both Sirius and XM platforms and enjoy our new Internet Radio service and mobile streaming apps. These innovations enhance and extend our subscribers' entertainment experience while positioning the company for continued leadership in the audio entertainment space. We believe these premium services, in addition to the modest price increase of our base subscription rate will contribute to growth in fiscal 2013 and beyond."

_________________________

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

Combined Information for 2011 quarterly and annual results assumes the combination of XM Canada and Sirius Canada Inc. occurred as of September 1, 2010. 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 *	IFRS FY2012	Combined FY2011	IFRS Q4 FY2012	Combined Q4 2011
	(ended August 31, 2012)	(ended August 31, 2011)	(ended August 31, 2012)	(ended August 31, 2011)
	(Audited)	(Unaudited)	(Unaudited)	(Unaudited)
Total Revenue	$259,619	$238,389	$68,119	$61,112
Adjusted EBITDA**	$46,562	$26,522	$12,220	$11,062
Net Income (Loss)	($4,179)	($17,336)	$6,117	$3,500
Operating*
Self-Paying Subscribers	1,584	1,393	1,584	1,393
Total Subscribers	2,206	1,983	2,206	1,983
Subscriber Acquisition Cost (SAC)	$49	$54	$46	$50
Cost Per Gross Addition (CPGA)	$75	$84	$76	$75

* 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 (loss) to both EBITDA and Adjusted EBITDA is provided below.

"We are pleased to announce that we have achieved our goal of $20 million in annualized synergies earlier than expected, as a result of our consistent focus on managing costs and optimizing operating efficiencies throughout fiscal 2012," said Michael Washinushi, CFO SiriusXM Canada. "In addition, we further strengthened our balance sheet during the year, reducing our liabilities by $12.1 million and ending Q4 with $51 million in cash and cash equivalents."

Financial review of FY2012 annual and Q4 IFRS results compared to Combined Information for the comparative quarterly and annual periods in 2011

For FY2012, revenue was $259.6 million, up $21.2 million, or 8.9%, from $238.4 million in 2011, entirely as a result of the growth in the Company's revenue-generating subscriber base. Q4 FY2012 revenue was $68.1 million, up $7.0 million, or 11.5%, from $61.1 million for the same period in 2011.

SAC was $49 in FY2012 down from $54 in 2011. SAC for Q4 FY2012 was $46, down from $50 for the same period in 2011. The decrease for the year and the quarter was due to lower subsidies and distribution costs and higher gross additions.

CPGA was $75 in FY2012 down from $84 in 2011 as a result of a decrease in marketing costs achieved through increased operating efficiencies and post-merger cost synergies coupled with higher gross subscriber additions. CPGA for Q4 FY2012 was $76, up slightly from $75 for the same period in 2011 primarily due to an in increase in marketing costs related to customer outreach around the pricing changes and rebranding costs in preparation for the holiday selling season.

FY2012 Adjusted EBITDA improved to $46.6 million, representing a 75.6% increase, or $20.1 million improvement, from Adjusted EBITDA of $26.5 million in 2011. The year-over-year increase was a result of the Company's top-line growth combined with a decrease in marketing, administrative and IT expenses, which was offset, in part, by a higher cost of revenue. Adjusted EBITDA for Q4 FY2012 was $12.2 million, up 10.5%, or $1.1 million, from $11.1 million for the same period in 2011.

In FY2012, SiriusXM Canada generated $41.1 million in cash from operations, used cash of $4.4 million in investing activities and used $11.6 million of cash in financing activities. The Company generated $36.6 million in free cash flow in FY2012. In Q4 FY2012, the Company generated $10.4 million in cash from operations, used $1.9 million of cash in investing activities, and less than $0.1 million in cash was provided by investing activities.The Company generated $8.5 million in free cash flow in Q4 FY2012.

As at August 31, 2012, SiriusXM Canada had total cash and cash equivalents of $51.0 million, up from $42.5 million as at May 31, 2012 and $26.0 million as at August 31, 2011.

Conference Call and Webcast Details

SiriusXM Canada will hold a conference call to discuss the Company's FY2012 annual and Q4 results on Thursday, November 15, 2012 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 call will be archived for replay until Thursday, November 22, 2012 at midnight. To access the archived conference call, please dial 416-849-0833, or 1-855-859-2056 and enter the reservation code 49643642. A live audio webcast of the conference callwill be available at http://www.siriusxm.ca and http://www.newswire.ca/en/webcast/detail/1054673/1146431. 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 unaudited EBITDA and unaudited Adjusted EBITDA to Operating Income (loss).

(In $000's)	IFRS FY2012	Combined FY2011		IFRS Q4 FY2012	Combined Q4 2011
	(Audited)	(Unaudited)**		(Unaudited)	(Unaudited)**
Operating income (loss)	2,844	(18,940)		3,013	(5,698)
Amortization	39,689	32,590		8,699	12,451
EBITDA	42,533	13,650		11,712	6,752
Stock based compensation	1,493	280		333	191
Severance and merger costs	1,383	12,321		2	3,848
Fair value adjustments*	1,152	271		173	271
Adjusted EBITDA	46,562	26,522		12,220	11,062

* Fair value adjustment relates to the reduction in revenue due to valuation of deferred revenue as per purchase price accounting
** In order to align with current reporting requirements, write off of intangibles of $4.2 million in 2011 has been reclassified from severance and merges costs to amortization. 2011 Adjusted EBITDA includes fair value adjustments to align with our current definition as of September 1, 2011.

Please see the Company's Management Discussion & Analysis filed November 14, 2012 for a more detailed explanation of the differences between IFRS actual financial results and the combined information described in this press release. 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 statement of operations and comprehensive income. Please see the Company's Management Discussion & Analysis filed November 14, 2012 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 future operating performance and merger benefits and costs synergies. 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. 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 Canadian Satellite Radio Holdings Inc.'s filings with the Canadian securities regulators, available at www.sedar.com.

About SiriusXM Canada

Canadian Satellite Radio Holdings Inc. (TSX: XSR) operates as SiriusXM Canada. SiriusXM Canada 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 from professional sports leagues 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, BlackBerry 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 BALANCE SHEETS
At		August 31,	August 31,	December 1,
(Canadian dollars)		2012	2011	2010 (note 1)
ASSETS
Current assets
Cash and cash equivalents		51,034,749	26,015,439	47,610,454
Accounts receivable		12,133,138	10,718,676	8,652,620
Prepaid expenses		3,361,448	2,587,736	1,918,196
Inventory		324,316	2,265,438	1,409,832
Total current assets		66,853,651	41,587,289	59,591,102
Long-term prepaid expenses		79,410	901,563	36,720
Property and equipment		7,617,399	9,680,308	2,636,352
Intangible assets		175,986,331	206,113,620	4,415,866
Deferred tax assets		59,858,394	51,545,684	—
Goodwill		96,732,525	96,732,525	—
Total assets		407,127,710	406,560,989	66,680,040
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Trade and other payables		39,085,800	32,870,628	31,239,110
Due to related parties		6,775,601	17,203,492	19,836,681
Interest payable		2,704,449	2,709,537	—
Current portion of deferred revenue		137,554,399	126,995,705	79,892,903
Provisions		1,285,587	2,123,557	1,126,980
Total current liabilities		187,405,836	181,902,919	132,095,674
Deferred revenue		21,019,320	20,084,379	12,710,409
Other long-term liabilities		6,902,537	9,248,840	200,156
Due to related parties		1,208,332	1,208,332	—
Deferred tax liabilities		—	—	1,133,756
Long-term debt		144,992,819	146,143,284	—
Provisions		344,112	497,197	—
Total liabilities		361,872,956	359,084,951	146,139,995
Shareholders' equity (deficiency)
Share capital		148,393,493	147,169,430	36,000,100
Contributed surplus		5,057,501	4,324,032	—
Accumulated deficit		(108,196,240)	(104,017,424)	(115,460,055)
Total shareholders' equity (deficiency)		45,254,754	47,476,038	(79,459,955)
Total liabilities and shareholders' equity		407,127,710	406,560,989	66,680,040

			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 (DEFICIENCY)
					Total
					Shareholders'
		Share	Contributed	Accumulated	Equity
(Canadian dollars)		Capital	Surplus	deficit	(deficiency)
Balance, December 1, 2010		36,000,100	—	(115,460,055)	(79,459,955)
Return of Capital		(36,000,000)	—	—	(36,000,000)
CSRH shares outstanding at time of merger		154,596,684	—	—	154,596,684
CSRH cash deficiency notes		(7,517,868)	—	—	(7,517,868)
Shares for interest - convertible note		67,999	—	—	67,999
Stock options exercised		22,515	(14,361)	—	8,154
Equity component of convertible debt acquired		—	1,539,196	—	1,539,196
Vested stock options at acquisition		—	2,614,513	—	2,614,513
Stock-based compensation		—	184,684	—	184,684
Net income for the period		—	—	17,853,108	17,853,108
Dividends on Class C preferred shares		—	—	(1,601,753)	(1,601,753)
Dividends on Class C common shares		—	—	(5,942,481)	(5,942,481)
Part VI.1 tax reversal		—	—	1,133,757	1,133,757
Balance, August 31, 2011		147,169,430	4,324,032	(104,017,424)	47,476,038
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

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(Canadian dollars)				Year from September 1, 2011 to August 31, 2012	Period from December 1, 2010 to August 31, 2011
Revenue				259,619,500	140,917,994
Operating expenses
	Operating costs			215,703,343	117,318,777
	Integration, severance and merger costs			1,383,105	3,501,293
	Depreciation and amortization			39,689,053	12,266,976
Operating income				2,843,999	7,830,948
Finance costs, net
	Interest income			360,906	329,145
	Interest expense			(16,699,532)	(3,427,853)
	Foreign exchange loss			(210,372)	(315,095)
	Loss on debt payment			—	(1,908,263)
	Gain on revaluation of derivative			1,213,473	—
Finance costs, net				(15,335,525)	(5,322,066)
Net income (loss) before income tax				(12,491,526)	2,508,882
Income tax recovery				8,312,710	15,344,226
Net income (loss) and comprehensive income (loss)				(4,178,816)	17,853,108
Basic and diluted (loss) earnings per share				(0.03)	0.19

CONSOLIDATED STATEMENTS OF CASH FLOWS
(Canadian dollars)			Year from September 1, 2011 to August 31, 2012	Period from December 1, 2010 to August 31, 2011
Cash provided by (used in)
OPERATING ACTIVITIES
Net income (loss) for the period			(4,178,816)	17,853,108
Add(deduct) items not involving cash
	Amortization of intangible assets		36,899,668	11,097,145
	Depreciation of property and equipment		2,789,385	1,169,831
	Deferred tax recovery		(8,312,710)	(15,344,226)
	Stock-based compensation		1,493,400	184,684
	Accrued interest		(5,088)	2,709,537
	Interest accretion		950,583	129,234
	Loss on repayment of debt		—	1,908,263
	Share issued for interest settlement		—	67,999
	Revaluation of derivative		(1,213,473)	—
	Unrealized foreign exchange losses (gains)		3,010	7,879
Net change in non-cash working capital and deferred revenue related to operations			12,649,125	(12,046,186)
Cash provided by operating activities			41,075,084	7,737,268
INVESTING ACTIVITIES
Cash acquired on acquisition			—	2,223,112
Proceeds on sale of property and equipment			—	1,757
Purchase of property and equipment			(728,425)	(180,198)
Purchase of intangible assets			(3,700,491)	(1,931,242)
Cash (used in) provided by investing activities			(4,428,916)	113,429
FINANCING ACTIVITIES
Distributions to shareholders			—	(44,723,690)
Proceeds from exercise of stock options			464,132	8,154
Proceeds from debt			—	62,000,000
Debt financing fees			—	(4,118,803)
Repayments of debt			(917,700)	(42,611,373)
Payment of related party promissory notes			(11,173,290)	—
Cash (used in) financing activities			(11,626,858)	(29,445,712)
Net increase (decrease) in cash and cash equivalents during the period			25,019,310	(21,595,015)
Cash and cash equivalents, beginning of period			26,015,439	47,610,454
Cash and cash equivalents, end of period			51,034,749	26,015,439

 

 

 

SOURCE: SiriusXM Canada

Morlan Reddock 
Sirius XM Canada 
416-513-7418 
[email protected] 

Kristen Dickson
TMX Equicom
416-815-0700 ext 273
[email protected]