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Astral records a 16th consecutive year of growth

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  • 10% increase in Diluted EPS1
  • 9% increase in Net Earnings1
  • 4% increase in EBITDA2
  • 1% in Revenues
  • 5% increase in Cash Flow from Operations2

MONTREAL, Oct. 31, 2012 /CNW Telbec/ - Astral Media Inc. (TSX: ACM.A ACM.B) today reported solid financial results for the fourth quarter and the year ended August 31, 2012 and delivered continued growth in revenues, EBITDA2, net earnings, EPS, and cash flow from operations2.

In Fiscal 2012, consolidated net earnings1 grew 9% over last year to $204.4 million from $188.0 million, while diluted earnings per share1 grew 10% to $3.64 from $3.30 last year. EBITDA2 rose 4% to $331.2 million from $318.4 million for the same period last year. Consolidated revenues for Fiscal 2012 totalled $1,021.9 million, a 1% increase over the $1,015.4 million recorded last year for the same period. Cash flow from operations2 rose a healthy 5% to $259.0 million for the year compared to $246.5 million for the corresponding period last year.

In the fourth quarter, consolidated net earnings1 grew 14% over last year to $54.3 million from $47.7 million, while diluted earnings per share1 grew 13% to $0.96 from $0.85 last year. EBITDA2 rose 11% to $85.6 million from $77.2 million for the same period last year. Consolidated revenues in the fourth quarter totalled $251.8 million, a 2% increase over the $247.6 million reported last year for the same period. Cash flow from operations2 rose 11% to $71.1 million for the fourth quarter compared to $63.8 million for the corresponding period last year.

"I am very pleased with the solid performance delivered by our business units in Fiscal 2012, particularly with the strong finish in the fourth quarter, consolidating the Company's 16th consecutive year of profitable growth," said Ian Greenberg, President and Chief Executive Officer. "We remain fully committed to maintain the same financial discipline that allowed the Company to grow in Fiscal 2012 and to continue to invest in content and new products in order to offer the highest possible quality of products and services."

Bell-Astral Transaction3
On March 16, 2012, the Company announced that it entered into a definitive agreement with BCE Inc. ("Bell") for the sale of its business through the acquisition of all of its issued and outstanding shares. The transaction is valued at approximately $3.38 billion, including an estimated net debt of $380.0 million. The transaction is subject to closing conditions, including regulatory approvals from the CRTC and the Competition Bureau. On October 18, 2012 the CRTC issued its decision on Bell's application for authority to acquire and change the effective control of the Company and denied Bell's application. On October 22, 2012, Bell submitted its request that the Federal Cabinet issue a policy direction to the CRTC, under Section 7 of the Broadcasting Act, that directs the CRTC to follow its existing policies when reviewing change of control transactions in broadcasting. Bell stated that with such a Cabinet policy direction in place, it would then re-submit a Change of Control Application to the CRTC. There can be no assurance that the transaction will occur, or that it will occur on the terms and conditions currently contemplated.

FINANCIAL AND OPERATIONAL HIGHLIGHTS

Television

  • Revenue growth of 1% for the year (1% for the fourth quarter);
  • EBITDA2 growth of 2% for the year (1% for the fourth quarter);
  • In July 2012, launch of the new Cartoon Network service, currently available to 2.3 million subscribers on Cogeco, Eastlink, Telus and Bell;

Radio

  • Revenue decrease of 1% for the year (2% growth for the fourth quarter);
  • EBITDA2 growth of 4% for the year (23% growth for the fourth quarter);
  • In January 2012, Astral completed the acquisition of all outstanding shares of Shore Media Group Inc., a radio broadcaster in Vancouver, BC, for a consideration of $13.4 million;
  • In February 2012, launch of Astral Radio's all-new digital music service across NRJ and Virgin Radio networks.

Out-of-Home

  • Revenue growth of 8% for the year (6% for the fourth quarter);
  • EBITDA2 growth of 10% for the year (9% for the fourth quarter);
  • In June 2012, Astral Out-of-Home announced the addition of two new digital advertising faces in the greater Montréal region, bringing the total of faces in Astral's Digital Network to 41;
  • Subsequent to year-end, launch by Astral Out-of-Home of a brand new network of 30 urban Digital Columns in the heart of downtown Montréal.

Corporate

  • In October 2011, the Company established, in addition to its existing credit facility, a $700.0 million unsecured five-year revolving credit facility and entered into two new interest-rate swap agreements to hedge its exposure to interest rate fluctuations;
  • During the year, the Company repaid $133.0 million of its long-term debt and repurchased 423,800 Class A shares for a total consideration of $14.2 million.
  • Under the terms of the Bell-Astral Transaction3, the Company's dividend payment scheduled for August 2012 and activity under the Company's normal course issuer bid have been suspended;

The audited consolidated financial statements and related notes and the Management's Discussion and Analysis are available on the Company's website: www.astral.com. There will be a conference call with analysts and media at 2:30 p.m. (ET) on Wednesday, October 31, 2012. To access the conference call dial 1-800-731-5319. The conference call will also be broadcast live and archived for a three-month period on the Astral website at www.astral.com.

This press release contains certain forward-looking statements concerning the future performance of the Company. These forward-looking statements are based on current expectations. We caution that all forward-looking information is inherently uncertain and actual results may differ materially from the assumptions, estimates or expectations reflected or contained in the forward-looking information, and that actual future performance will be affected by a number of factors, including technological change, economic conditions, regulatory change, competitive factors and changes in accounting rules or standards,  many of which are beyond the Company's control. We disclaim any intention or obligation to update or revise any forward-looking statements.

Founded in 1961, Astral is one of Canada's largest media companies. It operates several of the country's most popular pay and specialty television, radio, out-of-home advertising and digital media properties. Astral plays a central role in community life across the country by offering diverse, rich and vibrant programming that meets the tastes and needs of consumers and advertisers. To learn more about Astral, visit www.astral.com.

1. Excluding acquisition and other costs, Bell-Astral transaction costs, impairment of broadcast licences and deferred income tax expense resulting from income tax rate change. See "Additional IFRS and Non-IFRS Measures" in Appendix 1.
2. See "Additional IFRS and Non-IFRS Measures" in Appendix 1.
3. See the "Bell-Astral Transaction" section in the Management's Discussion and Analysis.

ASTRAL MEDIA INC.
Consolidated Statements of Earnings
for the periods ended August 31, 2012 and 2011
(in thousands of Canadian dollars except for per-share data)
(unaudited)

       
  3 months   12 months
    2012     2011     2012     2011
                       
Revenues $ 251,801   $ 247,620   $ 1,021,926   $ 1,015,431
                       
Operating expenses   166,231     170,455     690,754     697,017
Acquisition and other costs   16     -     4,881     4,407
Depreciation of property, plant and equipment   4,599     6,970     26,668     28,001
Amortization of other intangible and non-current assets   2,733     2,224     8,656     8,254
Financial expense, net   2,885     4,587     14,198     20,737
Impairment charge on broadcast licences, net   21,085     22,164     21,085     22,164
Bell-Astral Transaction costs   6,557     -     12,789     -
                       
Earnings before income taxes   47,695     41,220     242,895     234,851
                       
Income tax expense before undernoted   19,206     15,728     72,457     72,074
Deferred tax recovery resulting from the impairment charge on broadcast licences   (5,136)     (4,293)     (5,136)     (4,293)
Deferred tax expense resulting from tax rate changes   2,267     -     2,267     -
    16,337     11,435     69,588     67,781
                       
Net earnings $ 31,358   $ 29,785   $ 173,307   $ 167,070
                       
Earnings per share                      
  - Basic $ 0.56   $ 0.53   $ 3.11   $ 2.96
  - Diluted $ 0.55   $ 0.53   $ 3.08   $ 2.93

 


ASTRAL MEDIA INC. 
Consolidated Statements of Comprehensive Income
for the periods ended August 31, 2012 and 2011
(in thousands of Canadian dollars)
(unaudited)

           
  3 months   12 months
    2012     2011     2012     2011
               
Net earnings $ 31,358   $ 29,785   $ 173,307   $ 167,070
                       
Other comprehensive income                      
Actuarial loss on employee future benefit plans, net of deferred tax recovery of $2.5 million and
$0.6 million respectively for the three months and $8.1 million and $0.5 million respectively for
the twelve months
  (6,641)     (1,596)     (22,275)     (1,307)
Change in fair value of derivatives designated as cash flow hedges, net of deferred tax expense of
$0.3 million and $0.3 million respectively for the three months and $0.6 million and $2.1 million
respectively for the twelve months
  687     893     1,540     5,627
Comprehensive income $ 25,404   $ 29,082   $ 152,572   $ 171,390

 

 

ASTRAL MEDIA INC. 
Consolidated Statements of Cash Flows
for the periods ended August 31, 2012 and 2011
(in thousands of Canadian dollars)
(unaudited)

       
  3 months   12 months
    2012     2011     2012     2011
                       
OPERATING ACTIVITIES                      
  Net earnings $ 31,358   $ 29,785   $ 173,307   $ 167,070
                       
  Non-cash items:                      
    Stock-based compensation costs   1,539     1,124     11,244     7,099
    Depreciation and amortization   7,332     9,194     35,324     36,255
    Imputed interest, net   417     428     1,509     1,638
    Amortization of deferred financing costs   273     171     1,022     686
    Impairment charge on broadcast licences, net   21,085     22,164     21,085     22,164
    Deferred tax expense   6,784     909     13,207     11,565
    Deferred tax expense resulting from tax rate changes   2,267     -     2,267     -
                       
  Cash flows from operations   71,055     63,775     258,965     246,477
                       
  Additional pension plan contributions   (6,344)     (1,813)     (6,344)     (1,813)
  Net change in non-cash operating items   (11,004)     4,297     (41,185)     (1,465)
                       
Cash provided by operating activities   53,707     66,259     211,436     243,199
                       
INVESTING ACTIVITIES                      
  Additions to property, plant and equipment   (15,442)     (17,002)     (37,095)     (46,648)
  Additions to other intangible and non-current assets   (3,187)     (3,225)     (6,382)     (13,508)
  Business acquisition, net of cash acquired   (150)     -     (11,971)     -
  Contingent consideration relating to a previous business acquisition   -     (8,042)     -     (8,042)
Cash used for investing activities   (18,779)     (28,269)     (55,448)     (68,198)
                       
FINANCING ACTIVITIES                      
  Repayment of long-term debt   (33,000)     -     (133,000)     (65,000)
  Deferred financing costs   -     -     (2,017)     -
  Stock options exercised   105     655     19,317     13,518
  Shares repurchased   -     (18,212)     (14,126)     (70,137)
  Dividends   -     (20,895)     (27,923)     (42,274)
Cash used for financing activities   (32,895)     (38,452)     (157,749)     (163,893)
                       
Net change in cash   2,033     (462)     (1,761)     11,108
Cash - beginning of period   18,859     23,115     22,653     11,545
Cash - end of period $ 20,892   $ 22,653   $ 20,892   $ 22,653

 


ASTRAL MEDIA INC.  
Consolidated Balance Sheets as at
(in thousands of Canadian dollars)

               
  August 31,
2012
  August 31,
2011
  September 1,
2010
ASSETS                
                 
Current                
  Cash $ 20,892   $ 22,653   $ 11,545
  Accounts receivable   174,384     170,063     169,240
  Program and film rights   114,753     105,385     106,723
  Prepaid expenses and other current assets   29,007     29,096     29,451
    339,036     327,197     316,959
                 
Program and film rights   51,208     51,058     41,640
Property, plant and equipment   210,035     195,508     180,616
Broadcast licences   1,631,307     1,639,785     1,661,949
Goodwill   118,489     116,016     116,016
Other intangible and non-current assets   64,750     70,543     64,162
Non-current financial assets   16,084     19,852     22,848
Deferred tax assets   34,582     34,954     45,292
                 
  $ 2,465,491   $ 2,454,913   $ 2,449,482
                 
LIABILITIES                
                 
Current                
  Accounts payable and accrued liabilities $ 141,729   $ 141,893   $ 143,156
  Provisions   5,319     5,355     4,004
  Income taxes payable   15,531     13,560     16,654
  Program and film rights payable   63,619     77,033     64,908
  Other current financial liabilities   -     1,945     -
    226,198     239,786     228,722
                 
Long-term debt   390,138     524,133     588,447
Deferred tax liabilities   131,377     126,662     125,033
Program and film rights payable   7,446     8,839     12,668
Provisions   6,717     5,453     5,244
Other non-current liabilities   76,556     57,124     63,820
Other non-current financial liabilities   8,466     10,116     20,311
    846,898     972,113     1,044,245
                 
SHAREHOLDERS' EQUITY                
Capital stock   778,548     762,572     768,762
Contributed surplus   20,445     17,278     18,903
Retained earnings   819,470     704,360     624,609
Accumulated other comprehensive income (loss)   130     (1,410)     (7,037)
    819,600     702,950     617,572
    1,618,593     1,482,800     1,405,237
  $ 2,465,491   $ 2,454,913   $ 2,449,482

 

ASTRAL MEDIA INC.
Business Segments
for the periods ended August 31, 2012 and 2011
(in thousands of Canadian dollars) (unaudited)

         
  3 months   12 months
  2012   2011     2012     2011
               
REVENUES                      
                       
Television $ 140,425   $ 139,681   $ 586,026   $ 582,231
Radio   84,129     82,177     335,993     340,300
Out-of-Home   27,247     25,762     99,907     92,900
                       
  $ 251,801   $ 247,620   $ 1,021,926   $ 1,015,431
                       
EBITDA(1)                      
                       
Television $ 47,591   $ 47,280   $ 214,981   $ 211,384
Radio   32,759     26,717     108,202     104,427
Out-of-Home   9,635     8,820     33,979     30,758
Corporate   (4,415)     (5,652)     (25,990)     (28,155)
                       
  $ 85,570   $ 77,165   $ 331,172   $ 318,414

___________________

(1) See Appendix 1.

 

ASTRAL MEDIA INC.
Appendix 1
Additional IFRS and Non-IFRS Measures
for the periods ended August 31, 2012 and 2011
(unaudited)



In addition to discussing earnings measures in accordance with International Financial Reporting Standards ("IFRS"), this press release provides the following additional IFRS and non-IFRS measures which are also factors used by the Company's management and Board of Directors in monitoring and evaluating the performance of the Company and its business segments:

Additional IFRS Measure

Cash flow from operations is defined as cash provided by operating activities before additional pension plan contributions and the net change in non-cash operating items. This measure provides an indication of the Company's ability to generate cash flows without considering certain timing and other factors causing variations in non-cash operating items.

Non-IFRS Measures

EBITDA (earnings before interest, taxes, depreciation and amortization) is provided to assist investors in determining the ability of the Company to generate cash flow from operating activities and to cover financial charges. Other items such as acquisition and other costs, Bell-Astral Transaction costs and impairment of broadcast licences are also excluded from earnings in the determination of EBITDA as they are not considered to be in the ordinary course of business. EBITDA is also an indicator widely used for business valuation purposes. EBITDA margin is defined as the ratio obtained by dividing EBITDA by revenues. The following table reconciles IFRS measures disclosed in the audited consolidated statements of earnings for the periods ended August 31, 2012 and 2011 to EBITDA:

  3 months   12 months
(in thousands of $) 2012 2011   2012 2011
         
Earnings before income taxes 47,695 41,220   242,895 234,851
Depreciation and amortization 7,332 9,194   35,324 36,255
Financial expense, net 2,885 4,587   14,198 20,737
Acquisition and other costs 16 -   4,881 4,407
Bell-Astral Transaction costs 6,557 -   12,789 -
Impairment of broadcast licences, net 21,085 22,164   21,085 22,164
EBITDA 85,570 77,165   331,172 318,414



Earnings before income taxes, excluding impairment of broadcast licences. This measure provides an indication of the Company's ability to generate earnings and cash flows from its ongoing operations, by excluding the non-cash impairment of broadcast licences. The following table reconciles IFRS measures disclosed in the audited consolidated statements of earnings for the periods ended August 31, 2012 and 2011 to earnings before income taxes, excluding impairment of broadcast licences:

  3 months   12 months
(in thousands of $) 2012 2011   2012 2011
           
Earnings before income taxes 47,695 41,220   242,895 234,851
Impairment of broadcast licences, net 21,085 22,164   21,085 22,164
Earnings before income taxes, excluding impairment of broadcast licences 68,780 63,384   263,980 257,015



Net earnings and diluted earnings per share before acquisition and other costs, Bell-Astral Transaction costs, impairment of broadcast licences and tax rate changes. These measures provide an indication of the Company's ability to generate earnings from its ongoing operations, by excluding some items such as acquisition and other costs, Bell-Astral Transaction costs, impairment of broadcast licences and tax rate changes as they are not considered to be in the ordinary course of business.

The following tables reconcile IFRS measures disclosed in the audited consolidated statements of earnings for the periods ended August 31 2012 and 2011 to net earnings and diluted earnings per share before acquisition and other costs, Bell-Astral Transaction costs, impairment of broadcast licences and tax rate changes:

  3 months   12 months
(in thousands of $) 2012 2011   2012 2011
           
Net earnings 31,358 29,785   173,307 167,070
Acquisition and other costs, net of income taxes 12 -   3,616 3,091
Bell-Astral Transaction costs, net of income taxes 4,713 -   9,272 -
Impairment of broadcast licences, net of income taxes 15,949 17,871   15,949 17,871
Deferred tax expense resulting from tax rate changes 2,267 -   2,267 -
Net earnings before acquisition and other costs, Bell-Astral Transaction costs,
impairment of broadcast licences and  tax rate changes
54,299 47,656   204,411 188,032
       
          3 months   12 months
(in dollars) 2012 2011   2012 2011
           
Diluted earnings per share 0.55 0.53   3.08 2.93
Acquisition and other costs, net of income taxes - -   0.07 0.05
Bell-Astral Transaction costs, net of income taxes 0.09 -   0.17 -
Impairment of broadcast licences, net of income taxes 0.28 0.32   0.28 0.32
Deferred tax expense resulting from tax rate changes 0.04 -   0.04 -
Diluted earnings per share before acquisition and other cost, Bell-Astral Transaction
costs, impairment of broadcast licences and tax rate changes
0.96 0.85   3.64 3.30



The above additional IFRS and non-IFRS measures do not have a standardized meaning prescribed by IFRS and may not be comparable to similar measures presented by other companies.

SOURCE ASTRAL MEDIA INC.



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