SiriusXM Canada Reports Record Adjusted EBITDA For First Quarter Fiscal 2016

SiriusXM Canada Reports Record Adjusted EBITDA For First Quarter Fiscal 2016

- Company's growth continues with top- and bottom-line improvements and record self-pay subscribers -

TORONTO, Jan. 13, 2016 /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 2016 first quarter ("Q1 FY2016") ended November 30, 2015 prepared in accordance with International Financial Reporting Standards (IFRS). A summary of IFRS financial results for Q1 FY2016 is attached. All results are reported in Canadian dollars unless otherwise stated.

Q1 FY2016 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) Q1 2016 Q1 2015 % Change4
------------ ------- ------- ---------

Nov 30, 2015 Nov 30, 2014

(Unaudited) (Unaudited)


Revenue 83,517 78,985 5.7%

Adjusted EBITDA (2) 23,518 22,906 2.7%

Net income and comprehensive income 10,075 8,024 25.6%

Free cash flow 10,229 13,679 -25.2%


Operating (1)

Self-Paying Subscribers 1,939 1,847 5.0%

Total Subscribers 2,713 2,603 4.2%
1.5%
Self-Pay ARPU (3) $12.57 $12.38

Subscriber Acquisition Cost (SAC) $40 $39 2.6%
-------------------------------- --- --- ---

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

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

(3)Self-Pay ARPU is derived from the total of
earned subscription revenue from Self-Pay
subscribers, 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.

4Percentage variances/changes are calculated
based on the exact numbers, therefore, amounts
may not sum as a result of rounding in certain
instances.


"With revenue growth, record Adjusted EBITDA and self-pay subscribers at an all-time high, fiscal 2016 is off to a strong start," said Mark Redmond, President and CEO, SiriusXM Canada. "We added close to 14,000 net self-pay subscribers in the quarter as we continue to drive net self-pay annual subscriber growth. We also delivered year-over-year improvements in self-pay ARPU and impressive self-pay churn of 1.93%. At more than 2.7 million total subscribers, we are one of the largest media subscription businesses in Canada. We continue to bring unmatched content to people across the country, as recently highlighted by Howard Stern's contract renewal. Our addressable market, combined with our strong OEM relationships, continue to grow and we look forward to further penetrating both the new and used vehicle segments. We remain intensely focused on further enhancing our subscribers' listening experience to continue delivering strong subscriber, revenue, Adjusted EBITDA and cash flow growth."

"We delivered strong revenue and Adjusted EBITDA growth in the quarter," said Jason Redman, Chief Financial Officer. "Adjusted EBITDA margins remain strong despite a one-time 16% increase in copyright fees. They also improved sequentially, primarily due to the seasonality of our CCD payments, the majority of which we recognize in Q4. We will continue to work towards further strengthening our financial results through the remainder of fiscal 2016 by optimizing the balance between expanding our subscriber base and improving self-pay ARPU, while also carefully managing investments in the business to support our long-term growth."

Q1 FY2016 Results Financial Review

For Q1 FY2016, revenue was $83.5 million, up $4.5 million, or 5.7%, from $79.0 million in Q1 FY2015. The year-over-year improvement reflects growth in the Company's self-paying subscriber base and an increase in Self-Pay ARPU. Q1 FY2016 Self-Pay ARPU was $12.57, up 1.5% from $12.38 in Q1 FY2015 driven by the Company's implementation of its increased Music Royalty and Regulatory Fee (MRF) on renewing subscribers.

Adjusted EBITDA for Q1 FY2016, increased $0.6 million, or 2.7%, to $23.5 million from $22.9 million in Q1 FY2015. The year-over-year increase was a result of revenue growth partly offset by an increase in the Company's copyright fees and higher royalties related to increased revenues.

The Company recorded net income of $10.1 million in Q1 FY2016, up $2.1 million, or 25.6%, compared to net income of $8.0 million in Q1 FY2015 as a result of better operational performance and lower depreciation and amortization charges.

SAC for Q1 FY2016 was $40, up from $39 in Q1 FY2015 as a result of, among other things, increased purchases in the Aftermarket segment and higher exchange rates, partly offset by lower average OEM subsidies.

In Q1 FY2016, the Company generated $17.2 million in cash from operating activities, marginally lower by $0.1 million, or 0.8%, from $17.3 million in cash from operating activities in Q1 FY2015. The Company generated free cash flow of $10.2 million in Q1 FY2016, lower by $3.5 million, or 25.2%, from $13.7 million in Q1 FY2015 as a result of a $3.3 million increase in capital expenditures related to our dual-band repeater network and other intangibles.

As at November 30, 2015, the Company had total cash and cash equivalents of $36.4 million compared to $26.1 million as at August 31, 2015. The increase is primarily due to cash flow from operating activities of $17.2 million in Q1 FY2016 offset by capital expenditures of $7.0 million.

Conference Call and Webcast Details

SiriusXM Canada will hold a conference call to discuss the Company's Q1 FY2016 results on Thursday, January 14, 2016 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 21, 2016 at midnight. To access the archived conference call, please dial 416-849-0833 or 1-855-859-2056 and enter reservation code: 4790167. A live audio webcast of the conference call will be available here: http://bit.ly/1OGvNvZ. 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

The following is a reconciliation of EBITDA and Adjusted EBITDA to Income (loss) before income taxes.



Adjusted EBITDA:
Reconciliation Q1 2016 Q1 2015

In ($ 000's) Nov 30, 2015 Nov 30, 2014
----------- ------------ ------------

(Unaudited) (Unaudited)


Net income and comprehensive income
before income tax 14,016 11,565

Interest expense & income, (net) 3,315 3,027

Foreign exchange loss 316 64

Depreciation and amortization 5,503 6,942
----------------------------- ----- -----

EBITDA 23,150 21,598
------ ------ ------

Stock-based compensation 368 1,306

Fair value adjustments * - 3
----------------------- --- ---

Adjusted EBITDA 23,518 22,906
--------------- ------ ------



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


For complete definition of non-GAAP measures and for more details on the Company's Q1 FY2015 results, please see the Company's Interim Management Discussion & Analysis filed January 13, 2016 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 financial statements for FY 2016.

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 2.7 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, 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, 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.


CONSOLIDATED INTERIM BALANCE SHEETS

(Unaudited)

At November 30, August 31,

(in
thousands
of
Canadian
dollars) 2015 2015
---------- ---- ----


ASSETS

Current
assets

Cash and
cash
equivalents 36,391 26,128

Accounts
receivable 10,662 9,436

Prepaid
expenses 3,291 5,337

Inventory 35 35
--------- --- ---

Total
current
assets 50,379 40,936
-------- ------ ------

Long-term
prepaid
expenses 263 305

Property
and
equipment 7,286 4,285

Intangible
assets 140,922 131,410

Deferred
tax
assets 15,487 19,428

Goodwill 96,733 96,733
-------- ------ ------

Total
assets 311,070 293,097
======= ======= =======


LIABILITIES
AND
SHAREHOLDERS'
DEFICIENCY

Current
liabilities

Trade and
other
payables 57,733 52,545

Due to
related
parties 13,028 15,950

Interest
payable 1,153 3,966

Deferred
revenue 152,981 153,076

Dividends
payable 13,504 -

Provisions 955 983
---------- --- ---

Total
current
liabilities 239,354 226,520
------------ ------- -------

Deferred
revenue 10,960 12,033

Other
long-
term
liabilities 10,426 651

Due to
related
parties 1,208 1,208

Long-term
debt 196,182 196,036

Provisions 98 95
---------- --- ---

Total
liabilities 458,228 436,543
------------ ------- -------


Shareholders'
deficiency

Share
capital 179,822 178,479

Contributed
surplus 7,191 8,817

Accumulated
deficit (334,171) (330,742)
----------- -------- --------

Total
shareholders'
deficiency (147,158) (143,446)
-------------- -------- --------

Total
liabilities
and
shareholders'
deficiency 311,070 293,097
============== ======= =======





CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN SHAREHOLDERS' DEFICIENCY

(Unaudited)


Total

For the three months
ended Share Contributed Accumulated Shareholders'

(in thousands of
Canadian dollars) Capital Surplus Deficit Deficiency
------------------ ------- ------- ------- ----------


Balance, September 1,
2014 176,862 6,067 (270,157) (87,228)

Net income and
comprehensive income - - 8,024 8,024

Stock-based
compensation - 1,306 - 1,306

Dividends - - (13,448) (13,448)

Stock options
exercised 260 (149) - 111
--- ---- --- ---

Balance, November 30,
2014 177,122 7,224 (275,581) (91,235)
------- ----- -------- -------


Balance, 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)

RSU and PSU awards,
net equity settlement 1,286 (1,681) - (395)

Stock options
exercised 57 (23) - 34
--- --- --- ---

Balance, November 30,
2015 179,822 7,191 (334,171) (147,158)
------- ----- -------- --------





CONSOLIDATED INTERIM STATEMENTS OF OPERATIONS AND

COMPREHENSIVE INCOME

(Unaudited)

Three months ended
------------------

November 30, November 30,

(in thousands of
Canadian dollars,
except per share) 2015 2014
------------------ ---- ----


Revenue 83,517 78,985


Operating expenses

Operating costs 60,367 57,387

Depreciation and amortization 5,503 6,942


Operating income 17,647 14,656



Finance costs, net

Interest income 60 90

Interest expense (3,375) (3,117)

Foreign exchange loss (316) (64)


Finance costs, net (3,631) (3,091)
------ ------


Net income and
comprehensive
income before
income tax 14,016 11,565
------ ------

Income tax expense (3,941) (3,541)
------ ------

Net income and
comprehensive
income 10,075 8,024
------ -----


Earnings per share
-basic and
diluted 0.08 0.06
---- ----





CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS

(Unaudited)


Three months ended
------------------

November 30, November 30,

(in thousands of Canadian
dollars) 2015 2014
------------------------- ---- ----

Cash provided by (used in)


OPERATING ACTIVITIES

Net income for the period 10,075 8,024

Add (deduct) items not
involving cash:

Amortization of intangible assets 5,070 6,493

Depreciation of property and
equipment 433 449

Income tax expense 3,941 3,541

Stock-based compensation 368 1,306

Accrued interest (2,813) (2,813)

Interest accretion 146 140

Foreign exchange loss 193 74

Net change in non-cash
working capital and
deferred revenue related to
operations (207) 129
---- ---

Cash provided by operating
activities 17,206 17,343
------ ------


INVESTING ACTIVITIES

Purchase of property and
equipment (1,425) (205)

Purchase of intangible
assets (5,552) (3,459)
------ ------

Cash used in investing
activities (6,977) (3,664)
------ ------


FINANCING ACTIVITIES

Proceeds from exercise of
stock options 34 111
--- ---

Cash provided by financing
activities 34 111
--- ---


Net increase in cash and
cash equivalents during the
period 10,263 13,790

Cash and cash equivalents,
beginning of period 26,128 23,868
------ ------

Cash and cash equivalents,
end of period 36,391 37,658
====== ======


SOURCE Sirius XM Canada Holdings Inc.

Sirius XM Canada Holdings Inc.

CONTACT: Odeta Kellici, SiriusXM Canada, Tel: 416-513-7416, Odeta.Kellici@siriusxm.ca; Kristen Dickson, NATIONAL Equicom, 416-848-1429, kdickson@national.ca


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