SiriusXM Canada Reports Second Quarter Fiscal 2015 Results

– Company delivers record revenue driven by expansion of its self-pay subscriber base and continued growth in Self-Pay ARPU –

TORONTO, April 9, 2015 /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 its fiscal 2015 second quarter ended February 28, 2015 prepared in accordance with International Financial Reporting Standards (IFRS). A summary of IFRS financial results for Q2 FY2015 is attached¹.  All results are reported in Canadian dollars unless otherwise stated.

Q2 FY2015 Financial and Operating Metrics

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

Financial^1	Q2 FY2015	Q2 FY2014	% Change		YTD FY2015	YTD FY2014	% Change
	(Feb 28, 2015)	(Feb 28, 2014)			(Feb 28, 2015)	(Feb 28, 2014)
	(Unaudited)	(Unaudited)			(Unaudited)	(Unaudited)
		(Restated)				(Restated)
Revenue	80,086	75,466	6.1%		159,071	151,902	4.7%
Adjusted EBITDA^2	23,331	22,523	3.6%		46,238	43,942	5.2%
Net Income before one-time adjustments ^4	9,948	6,213	60.1%		17,972	11,016	63.1%
Net Income (loss)	(25,140)	6,213	-504.7%		(17,116)	11,016	-255.4%
Free cash flow	11,296	9,876	14.4%		24,974	22,695	10.0%
Operating^1
Self-Paying Subscribers	1,862	1,769	5.3%		1,862	1,769	5.3%
Total Subscribers	2,552	2,388	6.9%		2,552	2,388	6.9%
Self-Pay ARPU^3	$12.48	$11.92	4.7%		$12.43	$12.00	3.6%
Subscriber Acquisition Cost (SAC)	$35	$40	-11.2%		$37	$41	-9.6%
Cost Per Gross Addition (CPGA)	$63	$67	-6.5%		$63	$68	-6.9%

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

²Adjusted EBITDA is a non-GAAP measure. A reconciliation of income (loss) before taxes to both EBITDA and Adjusted EBITDA is provided below.

³Self-Pay ARPU is derived from the total of earned subscription revenue from Self-Pay subscribers and the music royalty and regulatory fee and activation fees, divided by the monthly weighted average number of Self-Paying subscribers. Please see the Company's MD&A for a more detailed description.

⁴One-time adjustments include a $16.0 million withholding tax expense and a $19.1 million, non-cash income tax expense.

"As a result of growth in our self-pay subscriber base and self-pay ARPU, we generated improvements across all of our key financial metrics," said Mark Redmond, President and CEO, SiriusXM Canada. "We set a new quarterly revenue record and also delivered year-over-year improvements in Adjusted EBITDA and free cash flow, despite significantly higher copyright royalties and greater capital expenditures. As expected, we saw churn improve sequentially. It also improved year-over-year, even with the increase in the Music Royalty and Regulatory Fee we implemented last quarter. We believe this is a strong testament to the unmatched audio entertainment experience we provide and the loyalty of our current subscribers."

______________________________
¹ For a complete set of financial results including the accompanying notes please refer to the Company's filings on www.sedar.com

Mr. Redmond continued: "While we continue to experience seasonality in our business, we remain on track to generate net self-pay subscriber additions on a full-year basis. We continue to make strides in the pre-owned car market and remain well-positioned to benefit from strong auto industry fundamentals. We believe our continued subscriber growth, further improvements in self-pay ARPU and prudent cost management will lead to strong free cash flow generation through the remainder of the fiscal year and a supportable dividend."

CRA Update

SiriusXM Canada received a formal notice of reassessment ("Notice") from Canada Revenue Agency ("CRA") regarding the Company's August 31, 2006 tax return.  The Notice denied the full amount of non-capital losses and eligible capital expenditures related to the Company's share issuances to SiriusXM and certain OEM partners.  As a result of the Notice, the Company, as required, booked a non-cash, one-time income tax expense of $19.1 million in Q2 2015.

The CRA had also communicated its intent to assess the Company for withholding tax and related penalties and interest on the share issuance to Sirius XM.  Subsequent to the quarter, a formal notice of reassessment was received. The Company recorded a provision of $16.0 million in its interim consolidated financial statements. Management remains of the opinion, that after careful consideration and consultation with its professional advisors, that the Company's tax filing position is merited and completely disagrees with the position taken by the CRA.

"We are confident that our current tax filing position is correct," said Michael Washinushi, Chief Financial Officer, SiriusXM Canada. "We intend to vigorously defend our position and appeal the CRA's decision. We continue to see positive trends in our business and remain optimistic about the Company's long-term growth prospects. We do not believe that these reassessments will have an impact on our strategy going forward, and our quarterly dividend remains intact. We believe we have sufficient liquidity to satisfy all obligations."

Q2 FY2015 Results Financial Review

For Q2 FY2015, revenue was $80.1 million, up $4.6 million, or 6.1%, from $75.5 million for the same period in 2014. The year-over-year improvement reflects growth in the Company's self-paying subscriber base and an increase in Self-Pay ARPU, which were partially offset by a reduction in promotional revenue due to revised terms related to contract renewals with certain OEM partners. Q2 FY2015 Self-Pay ARPU was $12.48, up 4.7% from $11.92 in Q2 FY2014. The year-over-year improvement in quarterly Self-Pay ARPU was driven by the Company's implementation of its increased Music Royalty and Regulatory Fee (MRF) on renewing subscribers. For YTD FY2015, revenue was $159.1 million, up $7.2 million, or 4.7% from $151.9 million for the same period in FY2014. Self-Pay ARPU for YTD FY2015 was $12.43 compared to $12.00 for the same period in FY2014.

For Q2 FY2015 Adjusted EBITDA, which excludes a one-time adjustment related to the $16.0 million provision for withholding tax and related interest and penalties, was $23.3 million. This was a $0.8 million, or 3.6%, improvement compared to $22.5 million in Q2 FY2014. The year-over-year increase was a result of revenue growth and marketing related cost savings, which were offset, in part, primarily by a higher cost of revenue due to an increase in the Company's copyright royalties. YTD FY2015, Adjusted EBITDA, which excludes a one-time adjustment related to the provision the Company took, was $46.2 million, an increase of $2.3 million, or 5.2%, from $43.9 million for the same period in FY2014.

As a result of the one-time income tax expense and provision for withholding tax, totaling $35.1 million, related to the August 31, 2006 tax return, the Company recorded a net loss of $25.1 million in Q2 FY2015. Excluding the one-time events, the Company generated net income of $9.9 million in Q2 FY2015. This was up $3.7 million, or 60.1%, compared to net income of $6.2 million in Q2 FY2014. Net loss was $17.1 million for YTD FY2015. Excluding the one-time events, the Company generated net income of $18.0 million. Net income was up $7.0 million, or 63.1%, compared to net income of $11.0 million in the same period of FY2014.

SAC for Q2 FY2015 continued to benefit from the revised terms related to contract renewals with certain OEM partners, as well as a greater volume of gross additions from the pre-owned vehicle market where the cost to acquire subscribers is much lower.  SAC was $35 in Q2 FY2015, down from $40 in Q2 FY2014. For YTD FY2015, SAC decreased to $37 in FY2015 from $41 for the same period in FY2014.

CPGA was $63 in Q2 FY2015, down from $67 in Q2 FY2014, reflecting lower subsidy costs and higher gross additions from the pre-owned vehicle channel, the benefits of which were partially offset by a marginal increase in marketing costs. For YTD FY2015, CPGA decreased to $63 in FY2015 from $68 for the same period in FY2014.

In Q2 FY2015, the Company generated $17.3 million in cash from operating activities, up $4.1 million, or 31.4%, from $13.2 million in cash from operating activities in Q2 FY2014 as a result of year-over-year changes in working capital offset by timing of interest payment on long-term debt. For YTD FY2015, the Company generated $34.7 million in cash from operating activities, up $5.9 million, or 20.4%, from $28.8 million in cash from operating activities for the same period in FY2014.

The Company generated free cash flow of $11.3 million in Q2 FY2015, up $1.4 million, or 14.4%, from $9.9 million in Q2 FY2014 due to higher cash from operations of $4.1 million offset by increased capital spending of $2.7 million, related to the unification of the Company's Subscriber Management System, in Q2 FY2015. For YTD FY2015, the Company generated $25.0 million of free cash flow, compared to $22.7 million in same period of FY2014.

As at February 28, 2015, the Company had total cash and cash equivalents of $22.5 million compared to $37.7 million as at November 30, 2014. The decrease is due primarily to two dividend payments totalling $26.9 million and capital expenditures of $6.0 million, offset by cash from operating activities of $17.3 million.

Conference Call and Webcast Details

SiriusXM Canada will hold a conference call to discuss the Company's Q2 FY2015 results on Friday, April 10, 2015 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 Friday, April 17, 2015 at midnight. To access the archived conference call, please dial 416-849-0833, or 1-855-859-2056 and enter the reservation code 14918334. 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 EBITDA and Adjusted EBITDA to Income (loss) before income taxes.

	Three months ended			Six months ended
Adjusted EBITDA: Reconciliation	February 28, 2015	February 28, 2014		February 28, 2015	February 28, 2014
In ($ 000's)	Q2 2015	Q2 2014		YTD 2015	YTD 2014
Income/(Loss) before income taxes	(1,951)	8,650		9,613	15,505
Interest expense & income	3,029	3,864		6,056	7,575
Foreign exchange gain(loss) & other	124	243		189	295
Amortization	5,190	9,252		12,132	19,159
EBITDA	6,392	22,009		27,990	42,534
Withholding tax expense	16,000	-		16,000	-
Stock-based compensation	938	497		2,244	1,360
Fair value adjustments	1	17		4	48
Adjusted EBITDA	23,331	22,523		46,238	43,942
* Fair value adjustment relates to reduction in revenue due to valuation of deferred revenue as per purchase price accounting

For complete definition of non-GAAP measures and for more details on the Company's Q2 FY2015 results, please see the Company's Management Discussion & Analysis filed April 9, 2015 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 condensed consolidated interim financial statements for Q2 FY2015.

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, the redemption of Sirius XM Canada's 5.625% Senior Unsecured Notes, and the terms, timing and conditions of any refinancing of such notes. 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 more than 2.5 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, entertainment and major sports brands including the NHL, NFL, NBA, 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 six years in a row and 2013 and 2014 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.

CONSOLIDATED INTERIM BALANCE SHEETS (Unaudited)
At		February 28,	August 31,
(Canadian dollars)		2015	2014
ASSETS
Current assets
Cash and cash equivalents		22,465,088	23,868,423
Accounts receivable		12,407,383	13,454,489
Prepaid expenses and other		6,757,073	4,251,306
Inventory		236,896	559,081
Total current assets		41,866,440	42,133,299
Long-term prepaid expenses		353,119	456,039
Property and equipment		4,119,554	4,508,188
Intangible assets		131,232,166	134,971,363
Deferred tax assets		23,862,959	50,592,132
Goodwill		96,732,525	96,732,525
Total assets		298,166,763	329,393,546
LIABILITIES AND SHAREHOLDERS' EQUITY DEFICIENCY
Current liabilities
Trade and other payables		36,063,138	44,121,466
Due to related parties		8,896,011	9,146,135
Interest payable		3,965,753	3,965,753
Deferred revenue		150,092,198	146,110,758
Provisions		16,557,440	505,783
Total current liabilities		215,574,540	203,849,895
Deferred revenue		13,023,196	15,075,749
Other long-term liabilities		664,225	533,049
Due to related parties		1,208,332	1,323,965
Long-term debt		195,784,628	195,463,860
Provisions		388,717	374,240
Total liabilities		426,643,638	416,620,758
Shareholders' deficiency
Share capital		177,777,645	176,862,133
Contributed surplus		7,918,303	6,067,419
Accumulated deficit		(314,172,823)	(270,156,764)
Total shareholders' deficiency		(128,476,875)	(87,227,212)
Total liabilities and shareholders' deficiency		298,166,763	329,393,546

CONSOLIDATED INTERIM STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (Unaudited)
				Three months ended				Six months ended
(Canadian dollars)				February 28, 2015	February 28, 2014 Restated - see Note 2			February 28, 2015	February 28, 2014  Restated - see Note 2
Revenue				80,085,543	75,466,464			159,070,508	151,902,156
Operating expenses
	Operating costs			57,693,411	53,457,806			115,080,200	109,367,616
	Depreciation and amortization			5,189,985	9,251,586			12,132,295	19,159,302
Operating income				17,202,147	12,757,072			31,858,013	23,375,238
Withholding tax expense				(16,000,000)	—			(16,000,000)	—
Finance costs, net
	Interest income			82,580	165,618			173,026	345,043
	Interest expense			(3,111,666)	(4,029,653)			(6,228,983)	(7,920,139)
	Foreign exchange loss			(124,182)	(242,601)			(188,648)	(295,459)
Finance costs, net				(3,153,268)	(4,106,636)			(6,244,605)	(7,870,555)
Net income (loss) before income tax				(1,951,121)	8,650,436			9,613,408	15,504,683
Income tax expense				(23,188,540)	(2,437,786)			(26,729,173)	(4,488,590)
Net income (loss) and comprehensive income (loss)				(25,139,661)	6,212,650			(17,115,765)	11,016,093
Earnings (loss) per share - basic and diluted				(0.19)	0.05			(0.13)	0.09

CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (DEFICIENCY) (Unaudited)
					Total
For the six months ended,		Share	Contributed	Accumulated	Shareholders'
(Canadian dollars)		Capital	Surplus	Deficit	Deficiency
Balance, September 1, 2013		151,794,596	6,161,440	(149,712,623)	8,243,413
Net income for the period		—	—	11,016,093	11,016,093
Stock-based compensation		—	1,359,697	—	1,359,697
Dividends		—	—	(26,175,373)	(26,175,373)
Stock options exercised		2,866,448	(921,143)	—	1,945,305
Conversion of convertible notes		21,539,196	(1,539,196)	—	20,000,000
Balance, February 28, 2014		176,200,240	5,060,798	(164,871,903)	16,389,135
Balance, September 1, 2014		176,862,133	6,067,419	(270,156,764)	(87,227,212)
Net income (loss) for the period		—	—	(17,115,765)	(17,115,765)
Stock-based compensation		—	2,243,767	—	2,243,767
Dividends		—	—	(26,900,294)	(26,900,294)
Stock options exercised		915,512	(392,883)	—	522,629
Balance, February 28, 2015		177,777,645	7,918,303	(314,172,823)	(128,476,875)

CONSOLIDATED  INTERIM STATEMENTS OF CASH FLOWS (Unaudited)
			Three months ended			Six months ended
(Canadian dollars)			February 28,  2015	February 28, 2014 Restated - see Note 2		February 28,  2015		February 28, 2014 Restated - see  Note 2
Cash provided by (used in)
OPERATING ACTIVITIES
Net income (loss) for the period			(25,139,661)	6,212,650		(17,115,765)		11,016,093
Add(deduct) items not involving cash
	Amortization of intangible assets		4,749,174	8,538,416		11,241,933		17,188,496
	Depreciation of property and equipment		440,811	713,170		890,362		1,970,806
	Income tax expense		23,188,540	2,437,786		26,729,173		4,488,590
	Stock-based compensation		938,168	497,267		2,243,767		1,359,697
	Accrued interest		2,812,500	(3,871,675)		—		(284,132)
	Interest accretion		142,029	504,100		281,933		750,290
	Foreign exchange loss		181,753	174,937		255,660		236,918
Net change in non-cash working capital and deferred revenue related to operations			10,000,440	(2,034,860)		10,129,122		(7,942,246)
Cash provided by operating activities			17,313,754	13,171,791		34,656,185		28,784,512
INVESTING ACTIVITIES
Purchase of property and equipment			(613,338)	(134,094)		(818,552)		(696,062)
Purchase of intangible assets			(4,589,610)	(3,162,002)		(8,048,703)		(5,393,640)
Prepayment for property and equipment			(814,600)	—		(814,600)		—
Maturity of short-term investments			—	2,063,000		—		2,063,000
Interest received on short-term investments			—	125,075		—		125,075
Cash used in investing activities			(6,017,548)	(1,108,021)		(9,681,855)		(3,901,627)
FINANCING ACTIVITIES
Payment of dividends			(26,900,294)	(26,175,373)		(26,900,294)		(26,175,373)
Proceeds from exercise of stock options			411,249	920,316		522,629		1,945,305
Cash used in financing activities			(26,489,045)	(25,255,057)		(26,377,665)		(24,230,068)
Net increase in cash and cash equivalents during the period			(15,192,839)	(13,191,287)		(1,403,335)		652,817
Cash and cash equivalents, beginning of period			37,657,927	57,922,688		23,868,423		44,078,584
Cash and cash equivalents, end of period			22,465,088	44,731,401		22,465,088		44,731,401

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]