Astral delivers solid third quarter results
- 9% increase in revenues and 4% increase in EBITDA(1)
- 9% increase in net earnings and 9% increase in basic EPS
</pre>
<p/>
<p><span class="xn-location">MONTREAL</span>, <span class="xn-chron">July 15</span> /CNW Telbec/ - Astral Media Inc. (TSX: ACM.A/ACM.B) today reported solid financial results for the third quarter ended <span class="xn-chron">May 31, 2010</span>, which saw continued growth in revenues, EBITDA(1), net earnings, EPS, and cash flow from operations(5).</p>
<p>"I am delighted with Astral's performance in the third quarter and by the strong growth displayed by each of our business units. I am particularly pleased that our advertising revenues increased 11% and that our subscription revenues grew a strong 7%, contributing to Astral's 55th consecutive quarter of profitable growth," said <span class="xn-person">Ian Greenberg</span>, President and Chief Executive Officer. "While we still operate in a slowly recovering economic and advertising market environment, we continue to reinforce our relationship with key partners such as Disney, HBO, NRJ and Virgin and sustain our strategic investments to further strengthen our offering to consumers and advertisers."</p>
<p>In the third quarter, consolidated revenues reached <span class="xn-money">$253.6 million</span>, a 9% increase from the <span class="xn-money">$232.5 million</span> reported last year for the same period. EBITDA(1) grew 4% in the third quarter to <span class="xn-money">$84.9 million</span> from <span class="xn-money">$81.8 million</span> for the same period last year. Consolidated net earnings for the third quarter increased 9% over the same quarter last year, rising to <span class="xn-money">$48.5 million</span> (<span class="xn-money">$0.86</span> per share) from <span class="xn-money">$44.3 million</span> (<span class="xn-money">$0.79</span> per share). Cash flow from operations(5) for the third quarter increased 10% to <span class="xn-money">$64.6 million</span> from <span class="xn-money">$58.6 million</span> for the same period last year.</p>
<p>In the first nine months of Fiscal 2010, consolidated revenues totalled <span class="xn-money">$722.6 million</span>, an increase of 5% over the <span class="xn-money">$686.3 million</span> recorded last year for the same period. EBITDA(1) for the first nine months increased 13% to <span class="xn-money">$244.3 million</span>(4) from <span class="xn-money">$216.5 million</span>(2) for the same period last year. Consolidated net earnings for the first nine months increased by 25% over last year, to <span class="xn-money">$138.3 million</span>(3, 4) (<span class="xn-money">$2.45</span> per share(3, 4)) from <span class="xn-money">$111.0 million</span>(2) (<span class="xn-money">$1.98</span> per share(2)). Cash flow from operations(5) rose 15% to <span class="xn-money">$169.9 million</span>(3, 4) for the first nine months of the year compared to <span class="xn-money">$147.4 million</span>(2) for the same period last year.</p>
<p/>
<p>FINANCIAL AND OPERATIONAL HIGHLIGHTS</p>
<p/>
<p>Television</p>
<p/>
<pre>
- Revenue growth of 9% for the third quarter (7% growth for the nine-
month period);
- EBITDA(1) growth of 2% for the third quarter (14% growth for the nine-
month period(2, 4);
- Number of pay-TV subscribers (The Movie Network and Super Écran) grew
4% over the same period last year to over 1.8 million;
- On May 31, 2010, announcement of the launch of the new Playhouse Disney
télé service in French, available since July 5 on Bell TV.
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<p/>
<p>Radio</p>
<p/>
<pre>
- Revenue growth of 9% for the third quarter (2% growth for the nine-
month period);
- EBITDA(1) growth of 6% for the third quarter (9% growth for the nine-
month period(2, 4).
- On May 27, launch of 97.7 EZ Rock, a new station broadcasting in the
Ottawa-Gatineau market.
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<p/>
<p>Out-of-Home</p>
<p/>
<pre>
- Revenue growth of 10% for the third quarter (7% growth for the nine-
month period);
- EBITDA(1) growth of 11% for the third quarter (15% growth for the nine-
month period);
- Expansion of Canada's first national Digital outdoor advertising
network with the addition of two new digital advertising faces in the
Toronto market during the third quarter.
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<p/>
<p>Corporate</p>
<p/>
<pre>
- On May 27, the Company launched its new corporate brand identity;
- On June 28, the Company moved its executive offices and certain
divisional offices to the new Maison Astral building located at
1800 avenue McGill College in the heart of downtown Montréal.
</pre>
<p/>
<p>The unaudited interim consolidated financial statements with related notes and Management's Discussion and Analysis are available on the Company's website: <a href="http://www.astral.com">www.astral.com</a>.</p>
<p/>
<p>There will be a conference call with analysts and media at <span class="xn-chron">10:30 a.m.</span> on <span class="xn-chron">Thursday, July 15, 2010</span>. To access the conference call dial 1-877-974-0445. The conference call will also be broadcast live and archived for a three-month period on the Astral website at <a href="http://www.astral.com">www.astral.com</a>.</p>
<p/>
<p>Astral is one of Canada's largest media companies. It operates several of the country's most popular pay and specialty television, radio, out-of-home advertising and digital media properties. Astral plays a central role in community life across the country by offering diverse, rich and vibrant programming that meets the tastes and needs of consumers and advertisers. To learn more about Astral, visit <a href="http://www.astral.com">www.astral.com</a>.</p>
<p/>
<p>This press release contains certain forward-looking statements concerning the future performance of the Company. These forward-looking statements are based on current expectations. We caution that all forward-looking information is inherently uncertain and actual results may differ materially from the assumptions, estimates or expectations reflected or contained in the forward-looking information, and that actual future performance will be affected by a number of factors, including technological change, economic conditions, regulatory change, competitive factors and changes in accounting rules or standards, many of which are beyond the Company's control. We disclaim any intention or obligation to update or revise any forward-looking statements.</p>
<p/>
<pre>
1. EBITDA is defined as earnings before interest, taxes, depreciation and
amortization. See Appendix 1.
2. After the restatement of Fiscal 2009 figures following the adoption of
Section 3064 of the CICA Handbook. See details in the Management's
Discussion and Analysis.
3. Excluding the impact of an $8.4 million ($0.15 per share) non-cash
future income tax recovery resulting from future income tax rate
changes enacted by the Ontario Government. See Appendix 1.
4. Including the $11.6 million in Part II licence fees accrual reversal
($8.0 million net of income taxes or $0.14 per share) in the first
quarter of Fiscal 2010 ($3.2 million in Television and $8.4 million in
Radio). See details in the Management's Discussion and Analysis.
5. See Appendix 1.
ASTRAL MEDIA INC.
Interim Consolidated Statements of Earnings
for the periods ended May 31, 2010 and 2009
(in thousands of Canadian dollars except for per-share data)
(unaudited)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
3 months 9 months
-------------------------- --------------------------
2010 2009 2010 2009
------------------------------------------------------
(Restated)(1) (Restated)(1)
Revenues $ 253,597 $ 232,537 $ 722,563 $ 686,298
Operating expenses 168,663 150,703 478,229 469,823
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EBITDA(2) 84,934 81,834 244,334 216,475
Depreciation 6,459 5,627 18,886 16,245
Amortization
of intangible
assets 1,562 1,206 4,153 3,510
Interest
expense, net 6,509 8,926 20,312 28,990
Restructuring
charges - 616 - 3,307
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Earnings before
income taxes 70,404 65,459 200,983 164,423
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Income tax
provision before
undernoted 21,947 21,190 62,639 53,446
Future income
tax recovery
resulting from
income tax rate
changes - - (8,397) -
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21,947 21,190 54,242 53,446
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Net earnings $ 48,457 $ 44,269 $ 146,741 $ 110,977
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Earnings per share
- Basic $ 0.86 $ 0.79 $ 2.60 $ 1.98
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- Diluted $ 0.85 $ 0.78 $ 2.57 $ 1.96
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----------------
(1) Following the adoption of Canadian Institute of Chartered
Accountants' ("CICA") Handbook Section 3064, the Company has restated
results of operations for the three- and nine-month periods ended
May 31, 2009 (see Note 1.b) of the unaudited interim consolidated
financial statements).
(2) See Appendix 1.
ASTRAL MEDIA INC.
Interim Consolidated Statements of Cash Flows
for the periods ended May 31, 2010 and 2009
(in thousands of Canadian dollars)
(unaudited)
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3 months 9 months
-------------------------- --------------------------
2010 2009 2010 2009
------------------------------------------------------
Cash and cash (Restated)(1) (Restated)(1)
equivalents
provided by
(used for):
OPERATING
ACTIVITIES
Net earnings $ 48,457 $ 44,269 $ 146,741 $ 110,977
Non-cash charges
(credits):
Part II licence
fees accrual
reversal - - (11,552) -
Stock-based
compensation
costs 1,334 1,505 4,805 4,771
Depreciation
and
amortization 8,021 6,833 23,039 19,755
Imputed
interest
on other
non-current
liabilities 558 584 1,641 1,903
Amortization
of deferred
financing
costs 173 172 515 515
Future income
tax expense
before
undernoted 6,028 5,230 13,076 9,468
Future income
tax recovery
resulting
from income
tax rate
changes - - (8,397) -
------------------------------------------------------
Cash flow from
operations(2) 64,571 58,593 169,868 147,389
Net change in
non-cash
operating items (13,303) 7,275 (33,582) 11,805
------------------------------------------------------
Cash provided
by operating
activities 51,268 65,868 136,286 159,194
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INVESTING
ACTIVITIES
Short-term
investments
- cashed - - - 9,962
Additions to
property, plant
and equipment (11,388) (11,324) (31,471) (31,351)
Additions to
other
intangible and
non-current
assets (1,163) (4,081) (8,854) (5,376)
Business
acquisition,
net of cash
acquired - - - (2,787)
------------------------------------------------------
Cash used for
investing
activities (12,551) (15,405) (40,325) (29,552)
------------------------------------------------------
FINANCING
ACTIVITIES
Repayment of
long-term debt (55,000) (55,000) (95,000) (75,000)
Stock options
exercised 954 1,338 9,068 1,503
Shares
repurchased (665) - (1,523) -
Dividends (4) (4) (14,149) (14,038)
------------------------------------------------------
Cash used for
financing
activities (54,715) (53,666) (101,604) (87,535)
------------------------------------------------------
Net change in
cash and cash
equivalents (15,998) (3,203) (5,643) 42,107
Cash and cash
equivalents
(bank overdraft)
- beginning of
period 33,455 41,666 23,100 (3,644)
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Cash and cash
equivalents -
end of period $ 17,457 $ 38,463 $ 17,457 $ 38,463
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(1) Following the adoption of CICA Handbook Section 3064, the Company has
restated results of operations for the three- and nine-month periods
ended May 31, 2009 (see Note 1.b) of the unaudited interim
consolidated financial statements).
(2) See Appendix 1.
ASTRAL MEDIA INC.
Interim Consolidated Balance Sheets as at
(in thousands of Canadian dollars)
(unaudited)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
May 31, August 31,
2010 2009
--------------------------
(Restated)(1)
ASSETS
Current
Cash and cash equivalents $ 17,457 $ 23,100
Accounts receivable 175,086 143,803
Program and film rights 108,410 92,545
Prepaid expenses and other current assets 26,763 27,904
--------------------------
327,716 287,352
Program and film rights 52,809 61,219
Property, plant and equipment 162,177 151,637
Broadcast licences 1,413,059 1,408,037
Goodwill 356,945 356,945
Other intangible and non-current assets 59,865 50,894
Future income tax assets 61,097 79,522
--------------------------
$ 2,433,668 $ 2,395,606
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LIABILITIES
Current
Accounts payable and accrued liabilities $ 115,645 $ 138,771
Income taxes payable 20,511 12,191
Program and film rights payable 63,668 58,220
Future income tax liabilities 4,993 4,481
--------------------------
204,817 213,663
Long-term debt 598,276 692,761
Future income tax liabilities 232,355 243,353
Other non-current liabilities 75,976 65,267
Derivative financial instruments 10,953 22,377
--------------------------
1,122,377 1,237,421
--------------------------
SHAREHOLDERS' EQUITY
Capital stock 766,328 753,028
--------------------------
Contributed surplus 16,986 17,068
--------------------------
Retained earnings 535,922 404,198
Accumulated other comprehensive loss (7,945) (16,109)
--------------------------
527,977 388,089
--------------------------
1,311,291 1,158,185
--------------------------
$ 2,433,668 $ 2,395,606
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(1) Following the adoption of CICA Handbook Section 3064, the Company
has restated its consolidated balance sheet as at August 31, 2009
(see Note 1.b) of the unaudited interim consolidated financial
statements).
ASTRAL MEDIA INC.
Business Segments
for the periods ended May 31, 2010 and 2009
(in thousands)
(unaudited)
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3 months 9 months
-------------------------- --------------------------
2010 2009 2010 2009
------------------------------------------------------
(Restated)(1) (Restated)(1)
REVENUES
Television $ 144,895 $ 133,150 $ 415,570 $ 388,367
Radio 89,141 81,630 252,212 246,822
Out-of-Home 19,561 17,757 54,781 51,109
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$ 253,597 $ 232,537 $ 722,563 $ 686,298
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EBITDA(2)
Television $ 55,840 $ 54,497 $ 158,646 $ 139,054
Radio 28,948 27,335 88,459 81,226
Out-of-Home 7,355 6,606 18,225 15,917
Corporate Costs (7,209) (6,604) (20,996) (19,722)
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$ 84,934 $ 81,834 $ 244,334 $ 216,475
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(1) Following the adoption of CICA Handbook Section 3064, the Company
has restated results of operations for the three- and nine-month
periods ended May 31, 2009 (see Note 1.b) of the unaudited interim
consolidated financial statements).
(2) See Appendix 1.
ASTRAL MEDIA INC.
Appendix 1
Supplementary Measures
for the periods ended May 31, 2010 and 2009
(unaudited)
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<p/>
<p>In addition to discussing earnings measures in accordance with Canadian generally accepted accounting principles ("GAAP"), this Press Release provides the following supplementary measures which are also factors used by management in monitoring and evaluating the performance of the Company and its business segments:</p>
<p>EBITDA (earnings before interest, taxes, depreciation and amortization) is provided to assist investors in determining the ability of the Company to generate cash flow from operating activities and to cover financial charges. Other items such as restructuring charges are excluded from earnings in the determination of EBITDA as they are not considered to be in the ordinary course of business. EBITDA is also an indicator widely used for business valuation purposes. EBITDA margin is defined as the ratio obtained by dividing EBITDA by revenues.</p>
<p>The following table reconciles GAAP measures disclosed in the unaudited interim consolidated statements of earnings for the periods ended <span class="xn-chron">May 31, 2010</span> and 2009 to EBITDA:</p>
<p/>
<pre>
3 months 9 months
------------------------------------------------------
(in thousands of $) 2010 2009 2010 2009
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-------------------------------------------------------------------------
(Restated)(1) (Restated)(1)
Earnings before
income taxes 70,404 65,459 200,983 164,423
Depreciation and
amortization 8,021 6,833 23,039 19,755
Interest expense,
net 6,509 8,926 20,312 28,990
Restructuring
charges - 616 - 3,307
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EBITDA 84,934 81,834 244,334 216,475
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</pre>
<p/>
<p>Net earnings and basic earnings per share before the impact of future income tax rate changes. These measures provide an indication of the Company's ability to generate earnings and cash flows from its ongoing operations, by excluding the non-cash future income tax recovery or expense resulting from income tax rate changes over which the Company has no control.</p>
<p>The following tables reconcile GAAP measures disclosed in the unaudited interim consolidated statements of earnings for the periods ended <span class="xn-chron">May 31, 2010</span> and 2009 to net earnings and basic earnings per share, before the impact of future income tax rate changes.</p>
<p/>
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3 months 9 months
------------------------------------------------------
(in thousands of $) 2010 2009 2010 2009
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-------------------------------------------------------------------------
(Restated)(1) (Restated)(1)
Net earnings 48,457 44,269 146,741 110,977
Future income
tax recovery
resulting from
income tax rate
changes - - (8,397) -
-------------------------------------------------------------------------
Net earnings
before the
impact of future
income tax rate
changes 48,457 44,269 138,344 110,977
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3 months 9 months
------------------------------------------------------
(in dollars) 2010 2009 2010 2009
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-------------------------------------------------------------------------
(Restated)(1) (Restated)(1)
Basic earnings
per share 0.86 0.79 2.60 1.98
Impact of future
income tax rate
changes - - (0.15) -
Basic earnings
per share, before
the impact of
future income
tax rate changes 0.86 0.79 2.45 1.98
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</pre>
<p/>
<p>Cash flow from operations is defined as cash provided by operating activities before the net change in non-cash operating items. This measure provides an indication of the Company's ability to generate cash flows without considering certain timing and other factors causing variations in non-cash operating items.</p>
<p/>
<p>The following table reconciles GAAP measures disclosed in the unaudited interim consolidated statements of cash flows for the periods ended <span class="xn-chron">May 31, 2010</span> and 2009 to cash flow from operations:</p>
<p/>
<pre>
3 months 9 months
------------------------------------------------------
(in thousands of $) 2010 2009 2010 2009
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-------------------------------------------------------------------------
(Restated)(1) (Restated)(1)
Cash provided
by operating
activities 51,268 65,868 136,286 159,194
Net change in
non-cash
operating items 13,303 (7,275) 33,582 (11,805)
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Cash flow from
operations 64,571 58,593 169,868 147,389
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</pre>
<p/>
<p>The above supplementary measures do not have a standardized meaning prescribed by GAAP and may not be comparable to similar measures presented by other companies.</p>
<p/>
<pre>
(1) Following the adoption of CICA Handbook Section 3064, the Company
has restated results of operations for the three- and nine-month
periods ended May 31, 2009 (see Note 1.b) of the unaudited interim
consolidated financial statements).
For further information: Media: Hugues Mousseau, Manager, Corporate Communications, Astral Media Inc., 514-939-5000; Analysts: Claude Gagnon, Senior Vice-President and Chief Financial Officer, Astral Media Inc., 514-939-5000
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