Continued growth in satellite radio underpins XM Canada's solid second quarter performance
TORONTO, Apr 8, 2009 (Canada NewsWire via COMTEX)
40 per cent growth in self-paying subscribers 39 per cent growth in total revenue
Third consecutive quarter of Pre-Marketing Adjusted Operating Profit
Canadian Satellite Radio Holdings Inc., parent company of XM Canada, today announced its financial results for the second fiscal 2009 quarter ended February 28, 2009.
Second Quarter 2009 Financial Highlights
Three months ended February 28, 2009 versus three months ended February 29, 2008
- 39 per cent increase in total revenue
- 40 per cent growth in self-paying subscribers (from 251,400 in 2008 to 351,200 in 2009)
- Improved Pre-Marketing Adjusted Operating Profit to $0.3 million from loss of ($1.6 million)
- Improved net loss (before gain/loss) by $2.0 million or 10 per cent
"Our results are encouraging considering these challenging economic times," said Michael Moskowitz, President and Chief Executive Officer of XM Canada. "Satellite radio offers a high level of entertainment at a very attractive price and, as a result, consumers continue to adopt the great, high quality listening experience of XM. We continue to grow revenue and increase the number of self-paying subscribers. We are focused on executing against our business plan, which means pursuing a number of key growth initiatives and opportunities and managing costs across every level of the business in order to achieve our two key long-term objectives: sustainable cash flow and profitability."
Recent Business Highlights
- General Motors Canada announced a new incentive program called GM
Total Confidence, which includes a two-year paid XM satellite radio
subscription as well as other incentives to encourage people to enter
the car buying market again. The promotion commenced February 18, 2009
and further demonstrates GM's commitment to XM as well as XM satellite
radio's appeal to consumers.
- Toyota commences factory installations of XM Canada satellite radio in
five models in 2009, including the all new Toyota VENZA, with plans to
include the Lexus RX350 in 2010.
- As part of its focus to reduce costs and improve efficiencies, XM
Canada selects SYNNEX Canada, a leading distributor of technology
products, to be its exclusive supplier of aftermarket XM satellite
radio products in Canada.
- XM continues to be one of the biggest supporters of Canadian music,
most recently through its live-to-air broadcast of The Independent
Music Awards on The Verge (XM Canada's rock channel 87) and by
providing grants for Canadian musicians to attend South by Southwest
2009 in Austin, Texas. The Verge featured daily broadcasts of Canadian
artists performing at the festival.
Financial Performance Revenue increased $3.6 million, or 39 per cent, to $12.8 million from $9.2 million for the second quarters of 2009 and 2008, respectively. The increase was mostly attributable to an increase in the Company's growing subscriber base. "XM Canada's business continues to grow by approximately 40% annually, despite the economic environment," said Michael Moskowitz, President and Chief Executive Officer of XM Canada. "It's exciting to be part of a new technology that Canadians are subscribing to in large numbers."
Average Monthly Subscription Revenue per Subscriber (ARPU) was $11.50 and $11.61 for the second quarters of 2009 and 2008, respectively, representing a decline of 1 per cent year-over-year due to the fact that there were fewer days in the second quarter of 2009.
Adjusted Operating Profit (Loss) improved $3.0 million, to ($6.0 million) from ($9.0 million) for the second quarters of 2009 and 2008, respectively. The significant improvement in Adjusted Operating Profit (Loss) was driven primarily by a $3.6 million revenue improvement and a reduction of $1.2 million in marketing expenses versus the second quarter of 2008 offset by a $1.5 million increase in cost of revenue. As the Company continues to grow revenue and manage costs, Adjusted Operating Profit (Loss) is expected to continue to improve.
Pre-Marketing Adjusted Operating Profit (Loss) improved $1.9 million, to $0.3 million from ($1.6 million) for the second quarters of 2009 and 2008, respectively. This quarter is the third consecutive quarter in which we have generated Pre-Marketing Adjusted Operating Profit. As the Company continues to grow revenue and manage costs, Pre-Marketing Adjusted Operating Profit (Loss) is expected to continue to improve.
Per Subscriber Acquisition Cost (SAC) was $78 and $63 for the second quarters of 2009 and 2008, respectively. The increase in SAC is attributable to a one-time charge of $0.5 million taken during the quarter to reflect the end of life for a particular product.
Cost per Gross Addition (CPGA) was flat on a year-over-year basis. Although total marketing costs declined significantly compared to the second quarter of 2008, CPGA remained unchanged due to lower gross subscriber additions in the quarter compared to the same period last year.
The non-GAAP measures above should be used in addition to, but not as a substitute for, the analysis provided in the interim consolidated statement of operations and deficit.