TORONTO, Nov. 15, 2006 (Canada NewsWire via COMTEX News Network)
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Reports Fourth Quarter and year-end results
Year-end Highlights:
- Automobile manufacturer penetration higher than expected, including
recent GM announcement of 100,000 vehicles now delivered or on order
with XM radios factory-installed
- Agreements signed with auto partners that represent nearly
one million new vehicles annually
- TELUS and XM Canada launched Canada's first streaming cellular phone
service
- Canadian programming expanded to include exclusive contract with
morning talk host "The Pirate" Jeff Fillion on Sport Plus 172, Mike
Bullard Uncensored on Laugh Attack 153 and the exclusive addition of
"Oprah & Friends" on channel 156
- NHL exclusive agreement commences at the end of this season and XM
continues to broadcast more than 1,000 games per season
- Canadian sales of the revolutionary Pioneer inno(TM), the world's
first portable satellite radio receiver, are exceeding plan
- Donald McKenzie appointed Senior Vice President of Sales and
Marketing and Marc Comeau fills XM Canada Board position on behalf of
GM Canada
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Canadian Satellite Radio Holdings Inc. ("CSR") (TSX:XSR), reported its financial results for the fourth quarter and year ended August 31, 2006 and confirmed that it has achieved 120,000 subscribers, including more than 91,200 self-paying subscribers. The 12-month subscriber achievement exceeds CSR's previous subscriber guidance of 75,000. "We are off to an incredible start and I am very pleased with what our management team has achieved in such a short period of time," said John Bitove, Chairman and CEO. "We are very well positioned for long-term success with all that we have completed this year. We look forward to continued growth in 2007 with the most extensive automotive partnership network and by offering the music and entertainment as well as innovative technology that Canadians want." Financial results For the three-month period ended August 31, 2006 (fourth fiscal quarter), CSR reported that revenue increased 46 per cent over the previous quarter, to $3.4 million, due to an increase in subscriptions, activations, advertising sales, and sales of radios from the direct fulfillment channel. XM Canada previously announced an increase of its monthly subscription price from $12.99 to $14.99. This increase did not take effect until September 1, 2006, subsequent to the end of the fourth quarter, but is expected to positively impact future revenue. Adjusted Operating Loss(1) for the three-month period was $14.4 million. As CSR had not launched operations a year ago, the corresponding prior year figures for CSR's fourth quarter and full-year 2005 results are not comparable. For the 12-month period ending August 31, 2006, CSR's revenues were $6.9 million with Adjusted Operating Loss of $56.4 million. For the fourth quarter, Average Revenue Per Unit was $11.78. CSR incurred Subscriber Acquisition Costs of $59, down from $69 the previous quarter, primarily as a result of new subscribers gained through the automotive channels. Cost Per Gross Addition of $242 remained essentially unchanged from the third quarter as a result of increased advertising and marketing expenses around Father's Day, one of the biggest selling seasons. Operational expenses for the three-month period ending August 31, 2006 included general and administrative (G&A) expenses of $5.4 million, marketing of $7.8 million and cost of revenue of $4.8 million. The preparation and launch of XM Canada satellite radio service for the 12-month period ended August 31, 2006 also includes operational expenses related to the build-out of a national repeater network, a project that was completed ahead of schedule and under budget. For the 12-month period, G&A was $18.5 million. These costs are primarily associated with the personnel and infrastructure expenses required to support our growing subscriber base. Marketing expenditures of $28.0 million and cost of revenue of $19.1 million were incurred to acquire new subscribers and to launch XM Canada during the 2005 holiday season. Most of the planned infrastructure rollout occurred in the first and second fiscal quarters of 2006. With these significant expenditures complete, XM Canada did not incur significant capital expenditures in the fourth quarter. Recent Developments: CSR has bolstered its management team with the recent addition of Donald McKenzie as Senior Vice President of Sales and Marketing. CSR announced today that Marc Comeau, Vice President - Sales, Service and Marketing of General Motors Canada Ltd., has joined the Board of Directors. Comeau fills the position vacated by Michael Grimaldi of GM Canada, who moved to South Korea as president of General Motors in Asia earlier in the year. GM Canada is allotted one seat on the Board of Directors as part of its minority ownership role of the Company and an agreement signed with CSR. Conference Call/Webcast John Bitove, Chairman and Chief Executive Officer, Stephen Tapp, President and Chief Operating Officer, and Michael Washinushi, Chief Financial Officer, will hold a conference call to discuss the fourth quarter results today, Thursday November 16, 2006 at 1 p.m. (ET). To participate in the conference call, please dial 416-644-3417 (Toronto) or 1-800-814-4941 (toll-free). A live audio webcast (listen-only mode) of the conference call will be available at http://www.newswire.ca/en/webcast/viewEvent.cgi?eventID(equalsign)1662540 and www.cdnsatrad.com. An archived recording of the conference call will be available at 1-416-640-1917 (Toronto) or 1-877-289-8525 (Toll-free) (Passcode: 21208839 followed by the number sign) on Thursday November 16, 2006 after 3 p.m. ET until November 30, 2006 at 11:59 p.m. EDT. Forward-Looking Statements Certain statements in this media release 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. Although CSR 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. CSR's forward-looking statements are expressly qualified in their entirety by this cautionary statement. CSR 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. Additional information identifying risks and uncertainties is contained in CSR's filings with the Canadian securities regulators, available at www.sedar.com. Related financial documents, including Interim Financial Statements and Management Discussion and Analysis, have been filed with SEDAR for posting to www.sedar.com. Copies of Canadian Satellite Radio Holdings Inc. financial documents are also available upon request through the www.cdnsatrad.com website and from the contact listed on this media release. About Canadian Satellite Radio Holdings Inc. Canadian Satellite Radio Holdings Inc. (TSX: XSR) operates as XM Canada(TM) through its subsidiary, Canadian Satellite Radio Inc. XM is the No. 1 satellite radio service in the universe with the best coverage in the country and offering a unique lineup of premier Canadian and international programming. XM Canada offers listeners up to 100 channels of unique and exclusive programming including the most NHL(TM) games, PGA TOUR(TM) and Major League Baseball(TM) coverage, the deepest play list, and news, talk, sports, entertainment and children's programming. After this season, XM will become the exclusive provider of NHL games on satellite radio. General Motors, Honda, Nissan, Toyota, Suzuki and Subaru will offer XM radios in more than 80 different models of vehicles for model year 2007. XM has an exclusive Canadian licence from U.S.-based XM Satellite Radio Inc. (NASDAQ: XMSR), the leading satellite radio provider in the U.S. with more than 7.1 million subscribers. XM is offered on TELUS Mobile Radio(TM). To find out more about Canadian Satellite Radio Inc. (TSX: XSR), visit our website at www.cdnsatrad.com. A live stream of selected XM Canada channels is available via a three-day complimentary trial of XM Radio Online at http://listen.xmradio.ca. To subscribe to XM Canada online or for more information about XM Canada's programming lineup and radio choice, visit www.xmradio.ca.
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(1) Adjusted Operating Loss defined in Consolidated Statement of
Operations and Deficit.
Canadian Satellite Radio Holdings Inc
Consolidated Balance Sheet (Unaudited)
2006 2005
$ $
Assets
Current assets
Cash and cash equivalents 45,188,214 20
Accounts receivable 2,125,367 -
Inventory 600,124 -
Prepaid expenses and other assets 6,882,247 -
Restricted investments 13,663,023 -
68,458,975 20
Restricted investments 19,370,939 -
Deferred financing costs 5,146,280 -
Property and equipment 23,221,760 1,996,606
Contract rights, distribution rights
and computer software 239,648,067 1,006,634
Total assets 355,846,021 3,003,260
Liabilities and Shareholders' Equity (Deficiency)
Current liabilities
Accounts payable and accrued liabilities 13,516,770 11,864,983
Deferred revenue 2,969,366 -
16,486,136 11,864,983
Long-term debt 110,660,000 -
Deferred revenue 1,032,289 -
Long-term obligations 310,405 16,987
Total liabilities 128,488,830 11,881,970
Shareholders' Equity (Deficiency)
Share capital 312,595,362 20
Contributed surplus 26,344,137 -
Deficit (111,582,308) (8,878,730)
Total shareholders' equity (deficiency) 227,357,191 (8,878,710)
Total liabilities and shareholders'
equity (deficiency) 355,846,021 3,003,260
Canadian Satellite Radio Holdings Inc.
Consolidated Statement of Operations and Deficit (Unaudited)
3 Months Ended
Aug 31, 12 Months Ended Aug 31,
2006 2006 2005
$ $ $
Revenue 3,417,373 6,949,282 -
Operating expenses
Cost of revenue 4,812,958 19,050,684 -
Indirect costs 0 827,125 3,528,914
General and administrative 5,428,765 18,465,217 3,172,480
Stock-based compensation 759,049 23,694,846 -
Marketing 7,774,874 28,021,159 -
Amortization of intangible assets
and property and equipment 5,470,009 15,914,239 3,865
24,245,655 105,973,270 6,705,259
Operating loss (20,828,282) (99,023,988) (6,705,259)
Interest revenue 1,001,512 2,619,481 -
Interest expenses (3,773,180) (8,279,303) -
Foreign exchange gains (131,858) 1,980,232 -
Net loss for the period (23,731,808) (102,703,578) (6,705,259)
Deficit - Beginning of period (87,850,500) (8,878,730) (2,173,471)
Deficit - End of period (111,582,308) (111,582,308) (8,878,730)
Basic and fully diluted
loss per share (0.50) (2.99) (17,833)
Canadian Satellite Radio Holdings Inc.
Reconciliation of Operating loss to Adjusted Operating Loss
3 Months 12 Months
Ended Ended
Aug 31, 2006 Aug 31, 2006
Operating loss as reported (20,828,282) (99,023,988)
Add back non-Adjusted Operating Loss items
included in Operating loss
Amortization 5,470,009 15,914,239
Stock-Based Compensation 759,049 23,694,846
Costs paid by parent company 186,277 3,049,041
Adjusted Operating Loss (14,412,947) (56,365,862)
Adjusted Operating Loss is defined as Operating loss excluding
amortization, stock-based compensation to employees, directors, officers and
service providers, and non-cash costs paid by parent company. We believe that
Adjusted Operating Loss, as opposed to Operating loss or Net loss, provides a
better measure of our core business operating results and improves
comparability. This non-GAAP measure should be used in addition to, but not as
a substitute for, the analysis provided in statement of operations. We believe
Adjusted Operating Loss is a useful measure of our operating performance and
is a significant basis used by our management to measure the operating
performance of our business. While amortization and stock-based compensation
are considered operating costs under generally accepted accounting principles,
these expenses primarily represent non-cash current period allocation of costs
associated with long-lived assets acquired or constructed in prior periods and
non-cash employee and service provider compensation. Costs paid by parent
company are non-cash costs related to the licence application process and are
not related to ongoing operations of the business. Adjusted Operating Loss is
a calculation used as a basis for investors and analysts to evaluate and
compare the periodic and future operating performances and value of similar
companies in our industry, although our measure of Adjusted Operating Loss may
not be comparable to similarly titled measures of other companies. Adjusted
Operating Loss does not purport to represent operating loss or cash flow from
operating activities, as those terms are defined under generally accepted
accounting principles, and should not be considered as an alternative to those
measurements as an indicator of our performance.
We do not report Adjusted Operating Loss for periods prior to fiscal 2006
as we were a development stage company focused on obtaining a licence from the
CRTC.
Canadian Satellite Radio Holdings Inc.
Consolidated Statement of Cash Flows (Unaudited)
2006 2005
$ $
Cash provided by (used in)
Operating activities
Net loss for the year (102,703,578) (6,705,259)
Add (deduct): Non-cash items
Costs paid by parent company 3,049,041 -
Stock-based compensation expense 23,694,846 -
Amortization of intangible assets 14,075,636 -
Amortization of property and equipment 1,838,603 3,865
Accrued interest - debt 519,161 -
Accrued interest receivable (814,774) -
Amortization of deferred financing costs 373,752 -
Interest accretion expense 25,299 -
Unrealized foreign exchange gains (2,098,253) -
Net change in non-cash working capital
related to operations (206,745) 6,701,394
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Net cash used in operating activities (62,247,012) -
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Investing activities
Restricted investments (41,015,595) -
Payment of interest expense from
restricted investments 7,396,855 -
Purchase of property and equipment (24,055,466) -
Purchase of computer software (8,570,715) -
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Net cash used in investing activities (66,244,921) -
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Financing activities
Initial public offering -
net of issuance costs 50,042,354 -
Shares issued to CSR Investments 15,000,000 -
Deferred financing costs (5,520,032) -
Proceeds from long-term debt 115,420,000 -
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Net cash provided by financing activities 174,942,322 -
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Foreign exchange loss on cash held
in foreign currency (1,262,195) -
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Change in cash and cash equivalents
during the year 45,188,194 -
Cash and cash equivalents - Beginning of year 20 20
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Cash and cash equivalents - End of year 45,188,214 20
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Supplemental cash flow disclosures
Rights acquired through issuance of shares 245,152,988 -
Property and equipment purchases
in accounts payable 736,778 1,729,148
Computer software purchases in
accounts payable - 1,006,634
Prepaid advertising purchased through
issuance of equity 2,000,000 -
Additions to property and equipment
and long-term obligations for
asset retirement obligations 268,119 16,987
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%SEDAR: 00022901E SOURCE: Canadian Satellite Radio Holdings Inc. SOURCE: XM Canada Jason Mercier, (416) 203-6666, jmercier@xmradio.ca Copyright (C) 2006 CNW Group. All rights reserved. |
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