Astral shows continued growth in the third quarter of Fiscal 2012

• 7% increase in net earnings¹
• 9% increase in diluted EPS¹

MONTREAL, July 12, 2012 /CNW Telbec/ - Astral Media Inc. (TSX: ACM.A ACM.B) today reported its financial results for the third quarter ended May 31, 2012, which saw continued growth in net earnings, EPS, EBITDA² and cash flow from operations².

For the third quarter, consolidated net earnings¹ grew by 7% to $56.2 million from $52.6 million for the same period last year, while diluted earnings per share grew 9% to $1.00 from $0.92 per share last year. Consolidated revenues for the third quarter totalled $265.5 million, a 1% decrease over the $268.0 million recorded last year for the same period. EBITDA² rose by 2% to $89.2 million from $87.8 million for the same period last year. Cash flow from operations² rose by 2% to $68.7 million for the third quarter compared to $67.3 million for the corresponding period last year.

For the first nine months of the year, consolidated net earnings¹ grew by 7% over last year to $150.1 million from $140.4 million, while diluted earnings per share¹ grew 9% to $2.67 from $2.45 last year. Consolidated revenues for the first nine months of Fiscal 2012 totalled $770.1 million, a slight increase over the $767.8 million recorded last year for the same period. EBITDA² rose by 2% to $245.6 million from $241.2 million for the same period last year. Cash flow from operations² rose by 3% to $187.9 million for the first nine months of the year compared to $182.7 million for the corresponding period last year.

"I am pleased by the third quarter results announced today and by Astral's ability to continue to achieve a strong performance in spite of the challenging advertising market in which we operate," said Ian Greenberg, President and Chief Executive Officer. "Our relentless focus on maintaining our operational margins, commitment towards new product development and innovation, and optimal treasury management practices, enabled us to deliver another strong quarter of earnings growth."

FINANCIAL AND OPERATIONAL HIGHLIGHTS

Television

• Revenue decline of 2% for the quarter (1% growth for the nine-month period);
• EBITDA² growth of 2% for the quarter (2% growth for the nine-month period²);
• Launch, on July 4, of the new Cartoon Network service, available to over one million subscribers on Cogeco, Eastlink and Telus.

Radio

• Revenue decline of 1% for the quarter (2% decline for the nine-month period);
• EBITDA² growth of 1% for the quarter (3% decline for the nine-month period).

Out-of-Home

• Revenue growth of 3% for the quarter (8% growth for the nine-month period);
• EBITDA² growth of 2% for the quarter (11% growth for the nine-month period);
• Announcement, on June 12, of the addition of two new Digital Network faces in the Greater Montréal region, bringing Astral's popular national Digital Network to 41 faces;
• Announcement, on June 19, of the launch of a new innovative urban Digital Columns network of 30 faces in the heart of downtown Montréal.

Corporate

• Following the announcement of the Bell-Astral Transaction³, the Company's dividend payment scheduled for August 2012 and activity under the Normal Course Issuer Bid have been suspended;
• During the third quarter, the Company repaid $70.0 million of its long-term debt for a total of $100.0 million after nine months;
• On May 24, Astral shareholders approved the acquisition of all of the Company's issued and outstanding shares by BCE Inc. (the "Bell-Astral Transaction");
• On May 25, the Québec Superior Court approved the plan of arrangement under section 192 of the Canada Business Corporations Act relative to the Bell-Astral Transaction³ and declared that the plan of arrangement is fair to shareholders of Astral.

The unaudited interim condensed consolidated financial statements with related notes and Management's Discussion and Analysis are available on the Company's website: www.astral.com.

There will be a conference call with analysts at 10:30 a.m. on Thursday, July 12, 2012. To access the conference call dial 1-800-731-5319. The conference call will also be broadcast live and archived for a three-month period on the Astral website at www.astral.com.

Founded in 1961, 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 www.astral.com.

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. Except as required under applicable securities regulations, we disclaim any intention or obligation to update or revise any forward-looking statements.

1.		Excluding acquisition and other costs, as well as Bell-Astral transaction costs. See details in the "Additional IFRS and Non-IFRS Measures" in Appendix 1.
2.		See "Additional IFRS and Non-IFRS Measures" in Appendix 1.
3.		See the "Acquisition of Astral" section in the Management's Discussion and Analysis.

ASTRAL MEDIA INC. Interim Consolidated Statements of Earnings for the periods ended May 31, 2012 and 2011 (in thousands of Canadian dollars except for per-share data) (unaudited)
		3 months				9 months
			2012		2011		2012		2011
Revenues		$	265,522	$	268,040	$	770,125	$	767,811
Operating expenses			176,365		180,172		524,523		526,562
Bell-Astral Transaction costs			6,232		-		6,232		-
Acquisition and other costs			554		4,407		4,865		4,407
Depreciation of property, plant and equipment			7,203		7,150		22,069		21,031
Amortization of other intangible and non-current assets			1,985		1,516		5,923		6,030
Financial expense, net			3,387		4,980		11,313		16,150
Earnings before income taxes			69,796		69,815		195,200		193,631
Income tax provision			18,608		20,275		53,251		56,346
Net earnings		$	51,188	$	49,540	$	141,949	$	137,285
Earnings per share
	- Basic	$	0.92	$	0.88	$	2.55	$	2.43
	- Diluted	$	0.91	$	0.87	$	2.53	$	2.40

ASTRAL MEDIA INC.  Interim Consolidated Statements of Comprehensive Income for the periods ended May 31, 2012 and 2011 (in thousands of Canadian dollars) (unaudited)
	3 months					9 months
		2012		2011		2012		2011
Net earnings	$	51,188	$	49,540	$	141,949	$	137,285
Other comprehensive income
Actuarial gain (loss) on employee future benefit plans, net of income tax expense (recovery) of ($1.9 million) and ($1.4 million) respectively for the three months, and ($5.6 million) and $0.1 million respectively for the nine months		(5,271)		(3,942)		(15,634)		289
Change in fair value of derivatives designated as cash flow hedges, net of income tax expense (recovery) of ($0.3 million) and $0.4 million respectively for the three months, and $0.3 million and $1.8 million respectively for the nine months		(780)		1,030		853		4,734
Comprehensive income	$	45,137	$	46,628	$	127,168	$	142,308

ASTRAL MEDIA INC.  Interim Consolidated Statements of Cash Flows for the periods ended May 31, 2012 and 2011 (in thousands of Canadian dollars) (unaudited)
			3 months					9 months
				2012		2011		2012		2011
OPERATING ACTIVITIES
	Net earnings		$	51,188	$	49,540	$	141,949	$	137,285
	Non-cash items:
		Stock-based compensation costs		5,681		1,759		9,705		5,975
		Depreciation and amortization		9,188		8,666		27,992		27,061
		Imputed interest, net		407		452		1,092		1,210
		Amortization of deferred financing costs		272		172		749		515
		Deferred tax expense		2,013		6,679		6,423		10,656
	Cash flows from operations			68,749		67,268		187,910		182,702
	Net change in non-cash operating items			8,666		14,294		(30,181)		(5,762)
Cash provided by operating activities				77,415		81,562		157,729		176,940
INVESTING ACTIVITIES
	Additions to property, plant and equipment			(9,271)		(11,959)		(21,653)		(29,646)
	Additions to other intangible and non-current assets			(899)		(2,434)		(3,195)		(10,283)
	Business acquisition, net of cash acquired			(301)		-		(11,821)		-
Cash used for investing activities				(10,471)		(14,393)		(36,669)		(39,929)
FINANCING ACTIVITIES
	Repayment of long-term debt			(70,000)		(55,000)		(100,000)		(65,000)
	Deferred financing costs			-		-		(2,017)		-
	Stock options exercised			1,936		260		19,212		12,863
	Shares repurchased			-		(20,485)		(14,126)		(51,925)
	Dividends			-		(4)		(27,923)		(21,379)
Cash used for financing activities				(68,064)		(75,229)		(124,854)		(125,441)
Net change in cash				(1,120)		(8,060)		(3,794)		11,570
Cash - beginning of period				19,979		31,175		22,653		11,545
Cash - end of period			$	18,859	$	23,115	$	18,859	$	23,115

ASTRAL MEDIA INC.   Interim Consolidated Balance Sheets as at (in thousands of Canadian dollars) (unaudited)
			May 31,		August 31,		September 1,
			2012		2011		2010
ASSETS
Current
	Cash	$	18,859	$	22,653	$	11,545
	Accounts receivable		181,273		170,063		169,240
	Program and film rights		105,564		105,385		106,723
	Prepaid expenses and other current assets		29,239		29,096		29,451
			334,935		327,197		316,959
Program and film rights			57,338		51,058		41,640
Property, plant and equipment			195,004		195,508		180,616
Broadcast licences			1,652,392		1,639,785		1,661,949
Goodwill			118,489		116,016		116,016
Other intangible and non-current assets			65,193		70,543		64,162
Non-current financial assets			16,227		19,852		22,848
Deferred tax assets			68,602		60,747		64,683
		$	2,508,180	$	2,480,706	$	2,468,873
LIABILITIES
Current
	Accounts payable and accrued liabilities	$	130,837	$	142,627	$	143,780
	Provisions		3,073		4,621		3,380
	Income taxes payable		22,736		13,560		16,654
	Program and film rights payable		74,791		77,033		64,908
	Other current financial liabilities		-		1,945		-
			231,437		239,786		228,722
Long-term debt			422,865		524,133		588,447
Deferred tax liabilities			159,578		152,455		144,424
Program and film rights payable			10,447		8,839		12,668
Provisions			5,740		5,453		5,244
Other non-current liabilities			76,152		57,124		63,820
Other non-current financial liabilities			9,791		10,116		20,311
			916,010		997,906		1,063,636
SHAREHOLDERS' EQUITY
Capital stock			779,386		762,572		768,762
Contributed surplus			18,588		17,278		18,903
Retained earnings			794,753		704,360		624,609
Accumulated other comprehensive loss			(557)		(1,410)		(7,037)
			794,196		702,950		617,572
			1,592,170		1,482,800		1,405,237
		$	2,508,180	$	2,480,706	$	2,468,873

 

ASTRAL MEDIA INC. Business Segments for the periods ended May 31, 2012 and 2011 (in thousands of Canadian dollars) (unaudited)
	3 months					9 months
		2012		2011		2012		2011
REVENUES
Television	$	151,488	$	153,987	$	445,601	$	442,550
Radio		89,376		90,096		251,864		258,123
Out-of-Home		24,658		23,957		72,660		67,138
	$	265,522	$	268,040	$	770,125	$	767,811
EBITDA^(1)
Television	$	59,117	$	58,207	$	167,390	$	164,104
Radio		29,456		29,227		75,443		77,710
Out-of-Home		8,199		8,072		24,344		21,938
Corporate		(7,615)		(7,638)		(21,575)		(22,503)
	$	89,157	$	87,868	$	245,602	$	241,249

^(1^)	See Appendix 1.

ASTRAL MEDIA INC.
Appendix 1
Additional IFRS and Non-IFRS Measures
for the periods ended May 31, 2012 and 2011
(unaudited)

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In addition to discussing earnings measures in accordance with International Financial Reporting Standards ("IFRS"), this Press Release provides the following additional IFRS and non-IFRS measures which are also factors used by the Company's management and Board of Directors in monitoring and evaluating the performance of the Company and its business segments:

Additional IFRS Measure

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.

Non-IFRS Measures

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 acquisition and other costs and Bell-Astral Transaction costs are also 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.

The following table reconciles IFRS measures disclosed in the unaudited interim consolidated statements of earnings for the periods ended May 31, 2012 and 2011 to EBITDA:

	3 months			9 months
(in thousands of $)	2012	2011		2012	2011
Earnings before income taxes	69,796	69,815		195,200	193,631
Depreciation and amortization	9,188	8,666		27,992	27,061
Financial expense, net	3,387	4,980		11,313	16,150
Acquisition and other costs	554	4,407		4,865	4,407
Bell-Astral Transaction costs	6,232	-		6,232	-
EBITDA	89,157	87,868		245,602	241,249

Net earnings and diluted earnings per share before acquisition and other costs and Bell-Astral Transaction costs. These measures provide an indication of the Company's ability to generate earnings from its ongoing operations, by excluding some items such as acquisition and other costs and Bell-Astral Transaction costs as they are not considered to be in the ordinary course of business.

The following tables reconcile IFRS measures disclosed in the unaudited interim consolidated statements of earnings for the periods ended May 31 2012 and 2011 to net earnings and diluted earnings per share before acquisition and other costs and Bell-Astral Transaction costs:

	3 months			9 months
(in thousands of $)	2012			2012	2011
Net earnings	51,188	49,540		141,949	137,285
Acquisition and other costs, net of income taxes	406	3,091		3,604	3,091
Bell-Astral Transaction costs, net of income taxes	4,570	-		4,570	-
Net earnings before acquisition and other costs and Bell-Astral Transaction costs	56,164	52,631		150,123	140,376
	3 months			9 months
(in dollars)	2012	2011		2012	2011
Diluted earnings per share	0.91	0.87		2.53	2.40
Acquisition and other costs, net of income taxes	0.01	0.05		0.06	0.05
Bell-Astral Transaction costs, net of income taxes	0.08	-		0.08	-
Diluted earnings per share before acquisition and other costs and Bell-Astral Transaction costs	1.00	0.92		2.67	2.45

The above additional IFRS and non-IFRS measures do not have a standardized meaning prescribed by IFRS and may not be comparable to similar measures presented by other companies.

 

 

 

 

 

Media:

Hugues Mousseau
Director, Corporate Communications
and Synergies
Astral Media Inc.
514-939-5000
[email protected]

Analysts :

Robert Fortier
Vice-President, Finance and
Chief Financial Officer
Astral Media Inc.
514-939-5000
[email protected]