SiriusXM Canada Reports First Quarter Fiscal 2017 Results

TORONTO, Jan. 11, 2017 /CNW/ - Sirius XM Canada Holdings Inc. ("SiriusXM Canada" or the "Company") (TSX: XSR), parent of Sirius XM Canada Inc., today released the unaudited financial results for its fiscal 2017 first quarter ("Q1 FY2017") ended November 30, 2016 prepared in accordance with International Financial Reporting Standards (IFRS). A summary of IFRS financial results for Q1 FY2017 is attached. All results are reported in thousands of Canadian dollars, except for subscribers and per share amounts, unless otherwise stated.

Q1 FY2017 Financial and Operating Metrics

The figures below include certain non-GAAP measures and industry metrics. These figures are subject to the qualifications and assumptions set out in the Company's notes to such results.

Financial ^1	Q1 FY2017		Q1 FY2016		% Change^5
	Nov 30, 2016		Nov 30, 2015
	(Unaudited)		(Unaudited)
Revenue	87,216		83,517		4.4%
Adjusted EBITDA ^2	24,244		23,518		3.1%
Net Income and comprehensive income	9,808		10,075		(2.7)%
Free cash flow^3	13,146		10,229		28.5%
Operating
Self-Pay subscribers	2,029		1,939		4.6%
Total subscribers	2,830		2,713		4.3%
Self-Pay ARPU ^4	$12.54		$12.57		(0.2)%
Subscriber Acquisition Cost (SAC)	$33		$40		(17.4)%

¹ All figures in the table are in thousands except ARPU and SAC.

² Adjusted EBITDA is a non-GAAP measure. A reconciliation of net income and comprehensive income before income tax to both EBITDA and Adjusted EBITDA is provided below.

³ Free cash flow is a non-GAAP measure. A reconciliation of free cash flow is provided below.

⁴ Self-Pay ARPU is derived from the total of earned subscription revenue from Self-Pay subscribers, music royalty fee, and activation fees divided by the monthly weighted average number of Self-Pay subscribers. Please see the Company's MD&A for a more detailed description.

⁵ Percentage variances/changes are calculated based on the exact numbers, therefore, amounts may not sum as a result of rounding in certain instances.

"In the quarter we continued to grow revenue and Adjusted EBITDA along with increasing our subscriber base, including strong growth from the pre-owned vehicle market", said Mark Redmond, President and CEO SiriusXM Canada. "In addition, we continued to deliver an unmatched listening experience, including the launch of VOLUME, the first 24/7 talk radio channel devoted to music, and full coverage of the NBA and NHL seasons. We are in the final stage of our Recapitalization go-private transaction and are awaiting the decision of the CRTC following its recent public consultation which concluded on January 9, 2017."

Q1 FY2017 Financial Results Review

For Q1 FY2017, revenue was $87,216, up $3,699, or 4.4%, from $83,517 in Q1 FY2016. The year-over-year improvement reflects growth in the Company's Self-Pay subscriber base. Q1 FY2017 Self-Pay ARPU was $12.54, down 0.2% from $12.57 in Q1 FY2016 due to increased promotional activity.

Adjusted EBITDA for Q1 FY2017 increased $726, or 3.1%, to $24,244 from $23,518 in Q1 FY2016. The improvement was due to higher revenue and lower subsidies and distribution costs, partly offset by higher marketing and revenue share and royalty costs.

The Company recorded net income and comprehensive income of $9,808 in Q1 FY2017, a decrease of $267, or 2.7%, compared to net income and comprehensive income of $10,075 in Q1 FY2016, which was mainly due to higher operating costs combined with depreciation and amortization, partly offset by increased revenues.

SAC for Q1 FY2017 was $33 down $7 from $40 in Q1 FY2016, which was mainly due to OEM partner mix and lower contractual OEM subsidy costs compared to the same period in FY2016.

In Q1 FY2017, the Company generated $15,468 in cash from operating activities compared to $17,206 in Q1 FY2016 primarily due to lower operating working capital combined with a decrease in operating income (inclusive of third party advisory costs as a result of the Recapitalization go-private transaction).

The Company generated free cash flow of $13,146 in Q1 FY2017, an improvement of $2,917 or 28.5%, from $10,229 in Q1 FY2016 primarily due to lower capital expenditures related to fewer additions to the dual-band terrestrial repeater network and XM activation fees, partly offset by a decrease in cash flow generated by operating activities.

At November 30, 2016, the Company had total cash of $53,525 compared to $40,379 at August 31, 2016.

Annual General Meeting

As the Company is in the process of finalizing its Recapitalization go-private transaction, it has obtained TSX approval to defer its Annual General Meeting. Additional details regarding the Annual General Meeting such as the meeting date, record date, time and location of the meeting, if required, will be communicated in a subsequent press release.

Conference Call and Webcast Details

SiriusXM Canada will hold a conference call to discuss the Company's Q1 FY2017 results on Thursday, January 12, 2017 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 will be archived for replay until Thursday, January 19, 2017 at midnight. To access the archived conference call, please dial 416-849-0833 or 1-855-859-2056 and enter reservation code: 40121558. A live audio webcast of the conference call will be available here: http://bit.ly/2hshZj4. Please connect at least 15 minutes prior to the conference call to ensure adequate time for any software downloads that may be required. An archived replay will be available for 90 days.

Reconciliations

Adjusted EBITDA: Reconciliation		Q1 FY2017		Q1 FY2016
(All amounts in thousands)		Nov 30, 2016		Nov 30, 2015
		(unaudited)		(unaudited)
	Net income and comprehensive income before income tax	13,739		14,016
	Interest expense & income (net)	3,176		3,315
	Foreign exchange loss	310		316
	Depreciation and amortization	6,040		5,503
EBITDA		23,265		23,150
	Stock-based compensation	593		368
	Third-party advisory costs	386		—
Adjusted EBITDA		24,244		23,518
Free Cash Flow: Reconciliation		Q1 FY2017		Q1 FY2016
(All amounts in thousands)		Nov 30, 2016		Nov 30, 2015
		(unaudited)		(unaudited)
	Cash flow provided by operating activities	15,468		17,206
	Purchase of property and equipment	(394)		(1,425)
	Purchase of intangible assets	(1,928)		(5,552)
Free Cash Flow		13,146		10,229

For a complete definition of non-GAAP measures, and for additional details on the Company's Q1 FY2017 results, please see the Company's MD&A filed January 11, 2017 which is incorporated herein by reference. 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 interim condensed consolidated financial statements for Q1 FY2017.

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 Company's Recapitalization go-private transaction, and the timing thereof, 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, and as a consequence, actual events, performance or results may not be consistent with such forward-looking statements. 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 approximately 2.8 million subscribers, is the country's leading audio entertainment company and broadcasts more than 130 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, entertainment and major sports brands including the NHL, NFL, NBA, MLB, NASCAR, CNN, CBC, FOX, BBC, Howard Stern, Disney, Comedy Central and more.

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 2,500 retail locations nationwide. To find out more about SiriusXM Canada (TSX: XSR), visit our website at www.siriusxm.ca.

SiriusXM Canada has been designated one of Canada's 50 Best Managed Companies seven years in a row and is currently a Platinum Club Member, in addition to 2013, 2014 and 2015 rankings in PROFIT 500's list of Canada's Fastest Growing Companies.

Join SiriusXM Canada on Facebook at facebook.com/siriusxmcanada, on Twitter at twitter.com/siriusxmcanada and on Youtube at youtube.com/siriusxmcanada.

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(Unaudited)
At	November 30,		August 31,
(All amounts in thousands)	2016		2016
ASSETS
Current assets
Cash	53,525		40,379
Accounts receivable	9,005		9,217
Prepaid expenses	1,248		1,318
Inventory	2,639		2,339
Total current assets	66,417		53,253
Property and equipment	10,555		10,678
Intangible assets	133,203		135,483
Deferred tax assets	4,586		8,517
Goodwill	96,733		96,733
Total assets	311,494		304,664
LIABILITIES AND SHAREHOLDERS' DEFICIENCY
Current liabilities
Trade and other payables	47,277		45,120
Due to related parties	17,912		16,557
Interest payable	1,153		3,966
Deferred revenue	153,854		156,929
Provisions	1,083		930
Total current liabilities	221,279		223,502
Deferred revenue	8,260		9,086
Other long-term liabilities	9,142		9,537
Due to related parties	1,208		1,208
Long-term debt	196,802		196,644
Total liabilities	436,691		439,977
Shareholders' deficiency
Share capital	180,280		180,280
Contributed surplus	6,251		5,943
Accumulated deficit	(311,728)		(321,536)
Total shareholders' deficiency	(125,197)		(135,313)
Total liabilities and shareholders' deficiency	311,494		304,664

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' DEFICIENCY
(Unaudited)
							Total
For the three months ended	Share		Contributed		Accumulated		Shareholders'
(All amounts in thousands)	Capital		Surplus		Deficit		Deficiency
At September 1, 2015	178,479		8,817		(330,742)		(143,446)
Net income and comprehensive income	—		—		10,075		10,075
Stock-based compensation	—		78		—		78
Dividends	—		—		(13,504)		(13,504)
Restricted Stock Units ("RSU") and Performance Stock Units ("PSU") awards, net equity settlement	1,286		(1,681)		—		(395)
Stock options exercised	57		(23)		—		34
At November 30, 2015	179,822		7,191		(334,171)		(147,158)
At September 1, 2016	180,280		5,943		(321,536)		(135,313)
Net income and comprehensive income	—		—		9,808		9,808
Stock-based compensation	—		308		—		308
At November 30, 2016	180,280		6,251		(311,728)		(125,197)

INTERIM CONDENSED CONSOLIDATED
STATEMENTS OF INCOME
(Unaudited)
			Three months ended
			November 30,	November 30,
(All amounts in thousands except per share amounts)			2016	2015
Revenue			87,216	83,517
Operating expenses
	Operating costs		63,951	60,367
	Depreciation and amortization		6,040	5,503
Operating income			17,225	17,647
	Interest income		96	60
	Interest expense		(3,272)	(3,375)
	Foreign exchange loss		(310)	(316)
Finance costs, net			(3,486)	(3,631)
Net income and comprehensive income before income tax			13,739	14,016
Income tax expense			(3,931)	(3,941)
Net income and comprehensive income			9,808	10,075
Earnings per share - basic and diluted			0.08	0.08

INTERIM CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(Unaudited)
				Three months ended
				November 30,		November 30,
(All amounts in thousands)				2016		2015
Cash provided by (used in)
OPERATING ACTIVITIES
Net income for the period				9,808		10,075
Add (deduct) items not involving cash:
	Amortization of intangible assets			5,649		5,070
	Depreciation of property and equipment			391		433
	Income tax expense			3,931		3,941
	Stock-based compensation			593		368
	Accrued interest			(2,813)		(2,813)
	Interest accretion			158		146
	Foreign exchange loss			314		193
Net change in non-cash working capital and deferred revenue related to operations				(2,563)		(207)
Cash provided by operating activities				15,468		17,206
INVESTING ACTIVITIES
Purchase of property and equipment				(394)		(1,425)
Purchase of intangible assets				(1,928)		(5,552)
Cash used in investing activities				(2,322)		(6,977)
FINANCING ACTIVITIES
Proceeds from exercise of stock options				—		34
Cash provided by financing activities				—		34
Net increase in cash during the period				13,146		10,263
Cash balance, beginning of period				40,379		26,128
Cash balance, end of period				53,525		36,391

SOURCE Sirius XM Canada Holdings Inc.

Odeta Kellici, SiriusXM Canada, 416-513-7416, [email protected]; Craig MacPhail, NATIONAL Equicom, 416-586-1938, [email protected]