SiriusXM Canada Generates Continued Year-Over-Year Growth in Q2 Fiscal 2013

• Total Subscribers of 2.2 million; year-over-year net additions of 183,800
• Revenue grew 10.8% to a record $70.7 million
• Adjusted EBITDA** increased 60.6% to a record $19.1 million
• Net income of $4.1 million, up $6.8 million year-over-year
• Free cash flow increased 10.0% to $13.0 million

TORONTO, April 11, 2013 /CNW/ - Sirius XM Canada Holdings Inc. ("SiriusXM Canada" or the "Company") (TSX: XSR), parent of Sirius XM Canada Inc., today released unaudited financial results for the quarter and year-to-date period ended February 28, 2013 ("Q2 FY2013" and "YTD FY2013" respectively) prepared in accordance with International Financial Reporting Standards (IFRS)¹. A summary of IFRS financial results for Q2 and YTD FY2013 is attached. All results are reported in Canadian dollars unless otherwise stated.

Q2 FY2013 Highlights

• Self-Paying Subscribers increased 12.8% to 1,640,800 from 1,454,500 at February 29, 2012
• Revenue grew 10.8% to $70.7 million from $63.8 million for Q2 FY2012
• Adjusted EBITDA increased 60.6% to $19.1 million from $11.9 million in Q2 FY2012
• Net income increased to $4.1 million from a loss of $2.7 million in Q2 FY2012
• Free cash flow increased 10.0% to $13.0 million from $11.8 million in Q2 FY2012
• Cash, cash equivalents and short term investments of $51.8 million at February 28, 2012
• Launched new sales program targeted at the pre-owned vehicle market

Year-to-date FY2013 Highlights

• Revenue grew 10.0% to $139.6 million from $126.9 million for the same period in FY2012
• Adjusted EBITDA increased 49.6% to $37.1 million from $24.8 million for the same period in FY2012
• Net income increased to $7.3 million from a loss of $6.1 million for the same period in FY2012
• Free cash flow increased 28.0% to $26.7 million from $20.8 million for the same period in FY2012

"Our year-over-year top-line improvements highlight our success in executing on our diversified revenue growth strategy," said Mark Redmond, President and CEO, SiriusXM Canada. "We added self-paying subscribers through our new car program and win back initiatives, and we benefited from our price increase. ARPU was up compared to Q2 last year. Reflecting our continued focus on cost efficiencies and profitable growth, we generated record Adjusted EBITDA and strong free cash flow. During the quarter, we also launched our in-dealership pre-owned vehicle program. We expect the pre-owned vehicle market to be an important growth driver over the long-term, as the number of satellite-equipped pre-owned vehicles on the road increases. Looking to the remainder of fiscal 2013, we believe we are well-positioned for continued year-over-year improvements in all of our key financial metrics as we continue to capitalize on our new service offerings, the pre-owned vehicle market and our overall enhanced customer experience."

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 *	Q2 FY2013		Q2 FY2012		YTD FY2013		YTD FY2012
	(ended February 28, 2013)		(ended February 29, 2012)		(ended February 28, 2013)		(ended February 29, 2012)
	(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)
Total Revenue	$70,689		$63,774		$139,581		$126,885
Adjusted EBITDA**	$19,113		$11,903		$37,070		$24,782
Net Income (Loss)	$4,079		($2,695)		$7,337		($6,107)
Operating*
Self-Paying Subscribers	1,641		1,455		1,641		1,455
Total Subscribers	2,200		2,016		2,200		2,016
Subscriber Acquisition Cost (SAC)	$44		$46		$45		$50
Cost Per Gross Addition (CPGA)	$72		$74		$72		$78

* 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 to both EBITDA and Adjusted EBITDA is provided below.

"Through our stable recurring revenue stream, now at $70 million a quarter, and ability to drive growth while managing our operating expenses and capital investments, we continue to generate strong free cash flow," said Michael Washinushi, CFO SiriusXM Canada. "Even when factoring in approximately $26 million in dividend payments by quarter end, we exited Q2 with a solid balance of $51.8 million in cash, cash equivalents and short-term investments. We have also further strengthened our overall financial profile, lowering our leverage ratio, net debt to Adjusted EBITDA, to 1.6 in Q2 2013 compared to 2.6 in Q2 last year."

Q2 and YTD FY2013 Financial Review
For Q2 FY2013, revenue was $70.7 million, up $6.9 million, or 10.8%, from $63.8 million in Q2 FY2012.  The year-over-year improvement was a result of the continued growth in the Company's revenue-generating subscriber base, as well as an increase in Average Revenue Per User (ARPU). Q2 FY2013 ARPU was $11.60, up from $11.57 in Q2 FY2012. For YTD FY2013, revenue was $139.6 million, up $12.7 million, or 10.0%, from $126.9 million for the same period in FY2012. ARPU for YTD FY2013 was $11.48 compared to $11.58 for the same period in FY2012.

SAC was $44 in Q2 FY2013, down from $46 in Q2 FY2012. The year-over-year improvement was due to lower subsidy costs and higher gross additions. SAC for YTD FY2013 was $45, down from $50 for the same period in FY2012.

CPGA was $72 in Q2 FY2013, down from $74 in Q2 FY2012. The year-over-year improvement reflects lower subsidy and marketing costs as well as higher gross subscriber additions. CPGA for YTD FY2013 was $72, down from $78 for the same period in FY2012.

Q2 FY2013 Adjusted EBITDA was $19.1 million, representing a 60.6%, or $7.2 million, increase from Adjusted EBITDA of $11.9 million in Q2 FY2012. The year-over-year improvement was a result of the combination of the Company's top-line growth and a $0.5 million decrease in total operating expenses. YTD FY2013 Adjusted EBITDA was $37.1 million, an increase of 49.6%, or $12.3 million, from $24.8 million for the same period in FY2012.

In Q2 FY2013, SiriusXM Canada generated $13.0 million in free cash flow. The Company generated $16.7 million in cash from operations, used cash of $9.0 million in investing activities and used $26.0 million of cash in financing activities. Comparatively, in Q2 FY2012, SiriusXM Canada generated $11.8 million in free cash flow. The Company generated $12.0 million in cash from operations, used cash of $0.2 million in investing activities and used $10.9 million of cash in financing activities. For YTD FY2013, SiriusXM Canada generated $26.7 million in free cash flow. The Company generated $31.8 million in cash from operations, used cash of $10.4 million in investing activities and used $25.8 million of cash in financing activities. Comparatively, for the same period in FY2012, SiriusXM Canada generated $20.8 million in free cash flow. The Company generated $22.0 million in cash from operations, used cash of $1.1 million in investing activities and used $10.8 million of cash in financing activities.

As at February 28, 2013, SiriusXM Canada had total cash, cash equivalents and short-term investments of $51.8 million, down from $64.9 million as at November 30, 2012. The decrease reflects the Company's efforts to strategically deploy its cash, paying $26.4 million in dividends as per its dividend policy.

Conference Call and Webcast Details
SiriusXM Canada will hold a conference call to discuss the Company's Q2 FY2013 results on Thursday, April 11, 2013 at 8:30 a.m. ET. All interested parties can join the call by dialling 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, April 18, 2013 at midnight. To access the archived conference call, please dial 416-849-0833, or 1-855-859-2056 and enter the reservation code 25972990. A live audio webcast of the conference call will be available at 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 unaudited EBITDA and unaudited Adjusted EBITDA to Operating Income.

(In $000's)	Q2 FY2013		Q2 FY2012		YTD FY2013		YTD FY2012
	(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)
Operating income	9,828		749		18,457		1,031
Depreciation & Amortization	8,703		10,044		17,137		20,984
EBITDA	18,531		10,794		35,593		22,015
Stock based compensation	538		433		1,332		827
Integration, severance and merger costs	-		359		-		1,277
Fair value adjustments*	44		317		144		663
Adjusted EBITDA	19,113		11,902		37,070		24,782

* Fair value adjustment relates to the reduction in revenue due to the valuation of deferred revenue as per purchase price accounting

Please see the Company's Management Discussion & Analysis filed April 11, 2013 for more details on the Company's Q2 and YTD 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 unaudited consolidated statement of operations and comprehensive income. Please see the Company's Management Discussion & Analysis filed April 11, 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 Canadian Satellite Radio 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 2.2 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, 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 INTERIM BALANCE SHEETS
(Unaudited)
(Canadian dollars)
		February 28,	August 31,
At		2013	2012
ASSETS
Current assets
Cash and cash equivalents		46,599,995	51,034,749
Short-term investments		5,233,123	—
Accounts receivable		9,208,275	12,133,138
Prepaid expenses		4,185,456	3,361,448
Inventory		135,528	324,316
Total current assets		65,362,377	66,853,651
Long-term prepaid expenses		100,590	79,410
Property and equipment		6,483,918	7,617,399
Intangible assets		167,619,374	175,986,331
Deferred tax assets		56,711,011	59,858,394
Goodwill		96,732,525	96,732,525
Total assets		393,009,795	407,127,710
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Trade and other payables		39,399,429	39,085,800
Due to related parties		8,161,183	6,775,601
Interest payable		2,686,983	2,704,449
Current portion of deferred revenue		140,318,985	137,554,399
Dividend payable		4,066,698	—
Provisions		1,656,865	1,285,587
Total current liabilities		196,290,143	187,405,836
Deferred revenue		19,586,397	21,019,320
Other long-term liabilities		4,720,813	6,902,537
Due to related parties		2,641,727	1,208,332
Long-term debt		145,461,873	144,992,819
Provisions		305,817	344,112
Total liabilities		369,006,770	361,872,956
Shareholders' equity
Share capital		149,560,177	148,393,493
Contributed surplus		5,803,543	5,057,501
Accumulated deficit		(131,360,695)	(108,196,240)
Total shareholders' equity		24,003,025	45,254,754
Total liabilities and shareholders' equity		393,009,795	407,127,710

 

CONSOLIDATED INTERIM STATEMENTS OF OPERATIONS AND COMPREHENSIVE
INCOME (LOSS)
(Unaudited)
(Canadian dollars)			Three Months ended			Six Months ended
			February 28,	February 29,		February 28,	February 29,
			2013	2012		2013	2012
Revenue			70,689,104	63,774,132		139,580,547	126,885,377
Operating expenses
	Operating costs		52,158,534	52,621,177		103,987,280	103,593,104
	Severance and merger costs		—	358,939		—	1,276,962
	Depreciation and amortization		8,702,594	10,044,378		17,136,596	20,984,463
Operating income			9,827,976	749,638		18,456,671	1,030,848
Finance costs, net
	Interest income		174,703	81,381		341,054	125,029
	Interest expense		(3,926,587)	(4,361,836)		(7,900,296)	(8,705,148)
	Foreign exchange gain (loss)		(315,846)	345,474		(464,510)	(156,575)
	Loss (gain) on revaluation of
	derivatives		—	10,714		51,378	(17,793)
Finance costs			(4,067,730)	(3,924,267)		(7,972,374)	(8,754,487)
Net income (loss) before income tax			5,760,246	(3,174,629)		10,484,297	(7,723,639)
Income tax (expense) recovery			(1,681,297)	479,759		(3,147,384)	1,617,012
Net income (loss) and comprehensive
income (loss)			4,078,949	(2,694,870)		7,336,913	(6,106,627)
Basic and fully diluted (loss) earnings
per share			0.03	(0.02)		0.06	(0.05)

CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN SHAREHOLDERS'
EQUITY
(Unaudited)
(Canadian dollars)
								Total
		Share		Contributed		Accumulated		Shareholders'
For the six months ended		Capital		Surplus		deficit		Equity
Balance, September 1, 2011		147,169,430		4,324,032		(104,017,424)		47,476,038
Total comprehensive (loss) for the year		—		—		(6,106,627)		(6,106,627)
Stock-based compensation		—		827,127		—		827,127
Stock options exercised		1,034,639		(640,731)		—		393,908
Balance, February 29, 2012		148,204,069		4,510,428		(110,124,051)		42,590,446
Balance, September 1, 2012		148,393,493		5,057,501		(108,196,240)		45,254,754
Total comprehensive income for the year		—		—		7,336,913		7,336,913
Stock-based compensation		—		1,332,080		—		1,332,080
Dividends		—		—		(30,501,368)		(30,501,368)
Stock options exercised		1,166,684		(586,038)		—		580,646
Balance, February 28, 2013		149,560,177		5,803,543		(131,360,695)		24,003,025

CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS
(Unaudited)
(Canadian dollars)		Three months ended			Six months ended
		February 28,	February		February 28,	February
		2013	29, 2012		2013	29, 2012
Cash provided by (used in)
OPERATING ACTIVITIES
Net income (loss) for the period		4,078,949	(2,694,870)		7,336,913	(6,106,627)
Add(deduct) items not involving cash
	Amortization of intangible assets	8,193, 125	9,376,466		15,983,134	19,527,649
	Depreciation of property and
equipment		510,762	667,913		1,154,755	1,456,814
	Deferred tax expense (recovery)	1,681,297	(479,759)		3,147,384	(1,617,012)
	Stock-based compensation	538,431	433,206		1,332,080	827,127
	Accrued interest	(3,605,009)	(3,635,519)		(17,466)	(18,195)
	Interest accretion	235,379	255,847		469,054	489,340
	Revaluation of derivative	—	(10,714)		(51,378)	17,793
	Unrealized foreign exchange losses
	(gains)	406,545	(257,680)		513,452	(154,424)
Net change in non-cash working capital
and deferred revenue related to
operations		4,662,701	8,324,567		1,966,695	7,561,533
Cash provided by operating activities		16,702,180	11,979,457		31,834,623	21,983,998
INVESTING ACTIVITIES
Purchase of property and equipment		(800)	(83,751)		(31,402)	(595,052)
Purchase of intangible assets		(3,736,944)	(111,926)		(5,129,230)	(550,683)
Purchase of bonds		(5,306,295)	—		(5,306,295)	—
Interest on bonds		51,574	—		51,574	—
Cash used by investing activities		(8,992,465)	(195,677)		(10,415,353)	(1,145,735)
FINANCING ACTIVITIES
Payment of dividends		(26,434,670)	—		(26,434,670)	—
Payment of related party promissory
notes		—	(11,173,290)		—	(11,173,290)
Proceeds from exercise of stock options		409,269	281,796		580,646	393,908
Cash used by financing activities		(26,025,401)	(10,891,494)		(25,854,024)	(10,779,382)
Net increase in cash and cash
equivalents during the period		(18,315,686)	892,286		(4,434,754)	10,058,881
Cash and cash equivalents, beginning of
period		64,915,681	35,182,034		51,034,749	26,015,439
Cash and cash equivalents, end of period		46,599,995	36,074,320		46,599,995	36,074,320

 

 

 

SOURCE: Sirius XM Canada Holdings Inc.

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

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