2014

Astral shows continued growth in the second quarter of Fiscal 2013

  • 8% increase in net earnings1
  • 6% increase in diluted EPS1
  • 5% increase in EBITDA2
  • 2% increase in revenues
  • 9% increase in cash flow from operations2

MONTREAL, April 11, 2013 /CNW Telbec/ - Astral Media Inc. (TSX: ACM.A ACM.B) today reported its financial results for the second quarter ended February 28, 2013, which saw continued growth in net earnings, EPS, EBITDA2, revenues and cash flow from operations2.

In the second quarter, consolidated net earnings1 totalled $41.2 million, an 8% increase over the $38.2 million recorded last year for the same period, while diluted earnings per share1 rose 6% to $0.73 from $0.69 last year. EBITDA2 grew 5% to $69.4 million from $66.0 million for the same period last year, while consolidated revenues reached $237.1 million, a 2% growth over the $233.5 million recorded last year. Cash flow from operations2 rose 9% to $54.7 million for the second quarter compared to $50.2 million for the corresponding period last year.

For the first half of the year, consolidated net earnings1 grew 7% to $100.8 million from $94.0 million for the same period last year, while diluted earnings per share1 increased by 6% to $1.78 from $1.68 last year. EBITDA2 totalled $163.1 million, a 4% increase over the $156.4 million recorded last year for the same period, while consolidated revenues rose 1% to $511.6 million compared to $504.6 million for the corresponding period last year. Cash flow from operations2 rose 4% to $123.9 million for the first half of the year compared to $119.2 million for the corresponding period last year.

"I am very pleased by the Company's performance in the second quarter of Fiscal 2013, which is Astral's 66th consecutive quarter of profitable growth," said Ian Greenberg, Astral's President and Chief Executive Officer. "Our diversified portfolio, innovative multiplatform offering and financial discipline enabled us to thrive in a still challenging market environment."

BELL-ASTRAL TRANSACTION3
On March 16, 2012, the Company announced that it entered into a definitive agreement with Bell for the sale of its business through the acquisition of all of its issued and outstanding shares. Following the October 18, 2012 decision of the CRTC to deny Bell's application to acquire the control of the Company, the Company and Bell announced on November 19, 2012 that they have amended the arrangement agreement signed on March 16, 2012 and submitted a new proposal to the CRTC for approval of Bell's acquisition of the Company. The outside date for the closing of the transaction is June 1, 2013, with each of the Company and Bell having a further right to postpone it to July 31, 2013. The consideration payable to the Company's shareholders remains unchanged under the amended arrangement agreement.

On March 4, 2013, the Company and Bell announced that the Canadian Competition Bureau has issued a "no action letter" in connection with the acquisition of the Company by Bell. The issuance of the no action letter constitutes one of the two required regulatory approvals contemplated in the Arrangement Agreement.

The Bell-Astral Transaction remains subject to closing conditions, including the approval of the CRTC. The CRTC approval is the only remaining regulatory approval required in connection with the Bell-Astral Transaction. The CRTC announced on March 6, 2013 that a public hearing will be held in Montreal, commencing on May 6, 2013, to consider the new proposal for the approval of the acquisition of the Company by Bell. There can be no assurance that the Bell-Astral Transaction will occur, or that it will occur on the terms and conditions currently contemplated.

FINANCIAL AND OPERATIONAL HIGHLIGHTS

Television

  • 2% revenue growth for the quarter (2% growth for the six-month period);
  • EBITDA2 growth of 6% for the quarter (5% for the six-month period);
  • Launch, on February 27, of The Movie Network GO including HBO GO, a new video streaming service giving subscribers access to The Movie Network, HBO Canada and TMN Encore from their iPhone, iPad, iPod touch, Mac or PC at no extra charge. The service is currently available to Bell TV, Cogeco and Rogers Cable subscribers.
  • Subsequent to end of quarter, TELETOON Retro reached the nine million subscribers mark, a record for subscriber penetration of any all-digital Canadian specialty channel.

Radio

  • Revenue decline of 1% for the quarter, a performance in line with that of the industry (consistent year-over-year performance for the six-month period, outperforming the industry);
  • On February 5, launch of Astral Radio's new Built for BlackBerry® application.

Out-of-Home

  • Revenue growth of 10% for the quarter (5% growth for the six-month period);
  • EBITDA2 growth of 9% for the quarter (3% growth for the six-month period);
  • On December 19, rollout of a new landmark in the domestic jetty at Montréal-Trudeau international airport;
  • In February, addition of 6 new Digital faces on Toronto's Gardiner Expressway, bringing Astral's popular national Digital Network to 51 faces.

Corporate

  • During the quarter, the Company repaid $22.0 million of its long-term debt for a total of $29.0 million since the beginning of the fiscal year and reduced its available credit facility by $240.0 million.
  • On February 1, Astral paid a cash dividend of $28.1 million to shareholders of record at the close of business on January 15, 2013.

The unaudited interim condensed consolidated financial statements with related notes and 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 10:30 a.m. ET on Thursday, April 11, 2013. 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.

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.

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. Except as required under applicable securities regulations, we disclaim any intention or obligation to update or revise any forward-looking statements.

  1. Excluding Bell-Astral transaction costs in Fiscal 2013 and acquisition and other costs in Fiscal 2012. See "Additional IFRS and Non-IFRS Measures" in Appendix 1.
  2. For more details, see "Additional IFRS and Non-IFRS Measures" in Appendix 1.
  3. For more details, see the "Bell-Astral Transaction" section in the Management's Discussion and Analysis for the periods ended February 28, 2013.


ASTRAL MEDIA INC.
Interim Consolidated Statements of Earnings
for the periods ended February 28, 2013 and February 29, 2012
(in thousands of Canadian dollars except for per-share data)
(unaudited)

                   
                   
    3 months     6 months
    2013   2012     2013   2012
                   
Revenues $ 237,102 $ 233,503   $ 511,567 $ 504,603
                   
Operating expenses   167,662   167,459     348,473   348,158
Depreciation of property, plant and equipment   7,040   7,360
  13,971   14,866
Amortization of other intangible and non-current assets   2,406   1,976     4,769   3,938
Financial expense, net   3,024   3,973     5,860   7,926
Acquisition and other costs   -   4,311     -   4,311
Bell-Astral Transaction costs   4,004   -     4,664   -
                   
Earnings before income taxes   52,966   48,424     133,830   125,404
                   
Income tax expense   14,637   13,419     36,396   34,643
                   
Net earnings $ 38,329 $ 35,005   $ 97,434 $ 90,761
                   
Earnings per share                  

- Basic $ 0.68 $ 0.63   $ 1.74 $ 1.64

- Diluted $ 0.68 $ 0.63   $ 1.72 $ 1.62

 


ASTRAL MEDIA INC. 
Interim Consolidated Statements of Comprehensive Income
for the periods ended February 28, 2013 and February 29, 2012
(in thousands of Canadian dollars)
(unaudited)

                   
                   
  3 months   6 months
    2013   2012     2013   2012
                   
Net earnings $ 38,329 $ 35,005   $ 97,434 $ 90,761
Item that is never subsequently reclassified to the statements of earnings                  
  Actuarial gain (loss) on employee future benefit plans, net of income tax expense (recovery) of $3.0 million and ($1.3 million) respectively for the three months, and $1.2 million and ($3.7 million) respectively for the six months   8,122   (3,591)     3,292   (10,363)
Item that may be subsequently reclassified to the statements of earnings                  
  Change in fair value of derivatives designated as cash flow hedges, net of income tax expense (recovery) of ($0.1 million) and $0.5 million respectively for the three months, and ($0.3 million) and $0.6 million respectively for the six months   (181)   1,523     (844)   1,633
                   
Other comprehensive income (loss)   7,941   (2,068)     2,448   (8,730)
                   
Comprehensive income $ 46,270 $ 32,937   $ 99,882 $ 82,031

 



ASTRAL MEDIA INC. 
Interim Consolidated Statements of Cash Flows
for the periods ended February 28, 2013 and February 29, 2012
(in thousands of Canadian dollars)
(unaudited)

                   
                   
    3 months   6 months
    2013   2012     2013   2012
                   
OPERATING ACTIVITIES                  
  Net earnings $ 38,329 $ 35,005   $ 97,434 $ 90,761
                   
  Non-cash items:                  
    Stock-based compensation costs   2,699   1,872     4,797   4,024
    Depreciation and amortization   9,446   9,336     18,740   18,804
    Imputed interest, net   372   426     660   685
    Amortization of deferred financing costs   606   272     887   477
    Deferred tax expense   3,270   3,288     1,368   4,410
                   
  Cash flows from operations   54,722   50,199     123,886   119,161
  Net change in non-cash operating items   22,357   6,260     (22,484)   (38,847)
                   
Cash provided by operating activities   77,079   56,459     101,402   80,314
                   
                   
                   
INVESTING ACTIVITIES                  
  Additions to property, plant and equipment   (6,382)   (6,808)     (16,090)   (12,382)
  Additions to other intangible and non-current assets   (2,040)   (1,344)     (3,039)   (2,296)
  Business acquisition, net of cash acquired   -   (11,520)     -   (11,520)
Cash used for investing activities   (8,422)   (19,672)     (19,129)   (26,198)
                   
FINANCING ACTIVITIES                  
  Repayment of long-term debt   (22,000)   (20,000)     (29,000)   (30,000)
  Deferred financing costs   -   (6)     -   (2,017)
  Stock options exercised   4,642   14,166     6,344   17,276
  Shares repurchased   -   (6,369)     -   (14,126)
  Dividends   (28,061)   (27,919)     (28,061)   (27,923)
Cash used for financing activities   (45,419)   (40,128)     (50,717)   (56,790)
                   
Net change in cash   23,238   (3,341)     31,556   (2,674)
Cash - beginning of period   29,210   23,320     20,892   22,653
Cash - end of period $ 52,448 $ 19,979   $ 52,448 $ 19,979



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

           
           
  February 28,
2013
August 31,
2012
         
ASSETS        
Current        
  Cash $ 52,448 $ 20,892
  Accounts receivable   172,193   174,384
  Program and film rights   114,331   114,753
  Prepaid expenses and other current assets   30,561   29,007
    369,533   339,036
         
Program and film rights   58,478   51,208
Property, plant and equipment   209,216   210,035
Broadcast licences   1,631,307   1,631,307
Goodwill   118,489   118,489
Other intangible and non-current assets   62,605   64,750
Non-current financial assets   15,691   16,084
Deferred tax assets   37,831   34,582
  $ 2,503,150 $ 2,465,491
         
LIABILITIES        
Current        
  Accounts payable and accrued liabilities $ 115,775 $ 141,729
  Provisions   2,978   5,319
  Income taxes payable   18,192   15,531
  Program and film rights payable   75,380   63,619
    212,325   226,198
         
Long-term debt   362,025   390,138
Deferred tax liabilities   136,882   131,377
Program and film rights payable   9,568   7,446
Provisions   6,258   6,717
Other non-current liabilities   67,494   76,556
Other non-current financial liabilities   8,910   8,466
    803,462   846,898
         
SHAREHOLDERS' EQUITY        
Capital stock   788,381   778,548
Contributed surplus   19,886   20,445
Retained earnings   892,135   819,470
Accumulated other comprehensive income (loss)   (714)   130
    891,421   819,600
    1,699,688   1,618,593
  $ 2,503,150 $ 2,465,491



ASTRAL MEDIA INC.
Business Segments
for the periods ended February 28, 2013 and February 29, 2012
(in thousands of Canadian dollars)
(unaudited)

                   
                   
  3 months   6 months
    2013   2012     2013   2012
                   
REVENUES                  
                   
Television $ 143,209 $ 140,561   $ 299,036 $ 294,113
Radio   73,254   74,197     162,040   162,488
Out-of-Home   20,639   18,745     50,491   48,002
                   
  $ 237,102 $ 233,503   $ 511,567 $ 504,603
                   
                   
EBITDA(1)                  
                   
Television $ 52,778 $ 49,665   $ 114,029 $ 108,273
Radio   17,569   18,396     45,342   45,987
Out-of-Home   4,689   4,310     16,624   16,145
Corporate   (5,596)   (6,327)     (12,901)   (13,960)
                   
                   
  $ 69,440 $ 66,044   $ 163,094 $ 156,445

 
(1) See Appendix 1.


ASTRAL MEDIA INC.
Appendix 1
Additional IFRS and Non-IFRS Measures
for the periods ended February 28, 2013 and February 29, 2012
(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 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, and Bell-Astral Transaction costs 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 unaudited interim consolidated statements of earnings for the periods ended February 28, 2013 and February 29, 2012 to EBITDA:

  3 months   6 months
(in thousands of $) 2013 2012   2013         2012
         
Earnings before income taxes      52,966          48,424      133,830    125,404
Depreciation and amortization 9,446   9,336        18,740      18,804
Financial expense, net 3,024   3,973          5,860        7,926
Acquisition and other costs      - 4,311              - 4,311
Bell-Astral Transaction costs 4,004      -          4,664        -
EBITDA          69,440          66,044      163,094    156,445


Net earnings and diluted earnings per share before acquisition and other costs, and Bell-Astral Transaction costs. 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, and Bell-Astral Transaction costs as they are not considered to be in the ordinary course of business.

The following tables reconcile IFRS measures disclosed in the unaudited interim consolidated statements of earnings for the periods ended February 28, 2013 and February 29, 2012 to net earnings and diluted earnings per share before acquisition and other costs, and Bell-Astral Transaction costs:

  3 months   6 months
(in thousands of $) 2013 2012   2013 2012
           
Net earnings 38,329 35,005   97,434 90,761
Acquisition and other costs, net of income taxes - 3,198   - 3,198
Bell-Astral Transaction costs, net of income taxes 2,896 -   3,380 -
Net earnings before acquisition and other costs, and Bell-Astral Transaction costs 41,225 38,203   100,814 93,959
           
           
  3 months   6 months
(in dollars) 2013 2012   2013 2012
           
Diluted earnings per share 0.68 0.63   1.72 1.62
Acquisition and other costs, net of income taxes - 0.06   - 0.06
Bell-Astral Transaction costs, net of income taxes 0.05 -   0.06 -
Diluted earnings per share before acquisition and other costs, and Bell-Astral Transaction costs 0.73 0.69   1.78 1.68


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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