Second Quarter Highlights
- Revenues decreased 16.0% to $64.3 million from
$7 6.6 million, primarily due to the impact of the COVID-19 pandemic on Radio revenues - Broadcasting and Commercial Music revenues increased 1.1% and Radio revenues decreased 33.6%
- Organic growth of 5.0% in Broadcast and Recurring Commercial Music revenues(1), 3.7% excluding the impact of foreign exchange, and organic growth of 11.7% in
the United States - Operating expenses decreased by 30.6% to
$34.7 million from $50.0 million - Adjusted EBITDA(2) increased 12.6% to $31.2 million from $27.7 million
- Cash flow from operating activities increased 34.1% to $25.4 million compared to $19.0 million
- Adjusted free cash flow(3) increased 21.9% to $22.9 million, or
$0 .31 per share, compared to $18.8 million or$0 .25 per share - Net debt to Pro Forma Adjusted EBITDA(3) ratio of 2.77x
- 480,000 streaming subscribers, up 31.5% over last year
Financial Highlights (in thousands of dollars, except per share data) | Three months ended September 30 | Six months ended September 30 | ||||||
2021 | 2020 | % | 2021 | 2020 | % | |||
Revenues | 64,294 | 76,573 | (16.0 | ) | 116,587 | 157,010 | (25.7 | ) |
Adjusted EBITDA(2) | 31,156 | 27,671 | 12.6 | 56,637 | 58,836 | (3.7 | ) | |
Net income | 11,888 | 5,184 | 129.3 | 18,909 | 14,367 | 31.6 | ||
Per share – diluted ($) | 0.16 | 0.07 | 128.6 | 0.26 | 0.19 | 36.8 | ||
Adjusted Net income(4) | 16,311 | 12,416 | 31.4 | 29,820 | 29,103 | 2.5 | ||
Per share – diluted ($)(4) | 0.22 | 0.16 | 37.5 | 0.40 | 0.38 | 5.3 | ||
Cash flow from operating activities | 25,406 | 18,952 | 34.1 | 63,399 | 45,250 | 40.1 | ||
Adjusted free cash flow(3) | 22,861 | 18,756 | 21.9 | 40,906 | 39,343 | 4.0 |
(1) | Recurring Commercial Music revenues include subscriptions and usage in addition to fixed fees charged to our customers on a monthly, quarterly and annual basis for continuous music services and excludes credits to clients related to the COVID-19 pandemic. Non-recurring revenues mainly include advertising, support, installation, equipment and one-time fees. |
(2) | Adjusted EBITDA is a non-IFRS measure and is defined as net income before net finance expense (income), change in fair value of investments, income taxes, depreciation and write-off of property and equipment, depreciation of right-of-use assets, amortization of intangible assets, share-based compensation, performance and deferred share unit expense, and acquisition, legal, restructuring and other expenses (income). |
(3) | Adjusted free cash flow is a non-IFRS measure and is defined as cash flow from operating activities less capital expenditures, interests paid and repayment of lease liabilities, plus acquisition, legal, restructuring and other expenses (income), and adjusted for unrealized gain or loss on foreign exchange and for the net change in non-cash working capital items. |
(4) | Adjusted Net income is a non-IFRS measure and is defined as net income before change in fair value of investments, mark-to-market losses (gains) on derivative instruments, amortization of intangible assets, share-based compensation, performance and deferred share unit expense, and acquisition, legal, restructuring and other expenses (income), net of related income taxes. |
“In the current context, we are extremely pleased with our second quarter results as Adjusted EBITDA and Adjusted free cash flow increased by 12.6% and 21.9% respectively, over the same period last year. Our strong results allowed us to further reduce our Net debt to Pro Forma Adjusted EBITDA ratio to 2.77 times,” stated
“Broadcasting and Commercial Music revenues increased 1.1% to
Our future vectors of growth performed very well during the quarter and achieved new milestones. While starting from a small base last year, advertising revenues increased more than five-fold reflecting primarily the much-expanded distribution of our FAST channels. In a seasonally soft quarter, streaming subscribers reached a new high of 480,000, up 10% on a sequential basis and 32% over last year. At the end of the second quarter, Stingray Business signed its first in-store media solution in the U.S. market marking an important milestone for future expansion combined with the recent partnership with Space Factory Media.
“Our Radio Business has continued to improve in recent months. Our Adjusted EBITDA for the second quarter experienced only a modest decline of 4.3% to
“In terms of capital allocation, debt reduction remains our top priority followed by our share repurchase program which was renewed in September. We continue to see opportunities for tuck-in acquisitions to complement and accelerate our significant organic growth prospects. Our transition to new IP content distributors accounted for most of our recent growth and will further accelerate as we leverage our extensive and diversified portfolio of premium music and media brands to address the ever-expanding need for content,” concluded
Second Quarter Results
Revenues in the second quarter decreased
For the quarter, revenues in
Broadcasting and Commercial Music revenues increased 0.5 million or 1.1% to
Radio revenues decreased
Adjusted EBITDA for the second quarter increased
For the second quarter, the Corporation reported a Net income of
Cash flow generated from operating activities amounted to
As of
Six months Results
Revenues for the first six months of Fiscal 2021 decreased
Adjusted EBITDA for the first six months of Fiscal 2021 decreased
Net income for the first six months of Fiscal 2021 was
Declaration of Dividend
On
The Corporation’s dividend policy is at the discretion of the Board of Directors and may vary depending upon, among other things, our available cash flow, results of operations, financial condition, business growth opportunities and other factors that the Board of Directors may deem relevant.
The dividends paid are designated as "eligible" dividends for the purposes of the Income Tax Act (
Additional Business Highlights and subsequent events
During the first six months of Fiscal 2021, global economies and financial markets were impacted by the coronavirus (“COVID-19”) outbreak as it quickly spread around the world and on
On
On
On
On
On
Conference Call
The Corporation will hold a conference call to discuss these results on
About Stingray
Forward-Looking Information
This news release contains forward-looking information within the meaning of applicable Canadian securities law. Such forward-looking information includes, but is not limited to, information with respect to Stingray's goals, beliefs, plans, expectations, anticipations, estimates and intentions. Forward-looking information is identified by the use of terms and phrases such as "may", "would", "should", "could", "expect", "intend", "estimate", "anticipate", "plan", "foresee", "believe", and "continue", or the negative of these terms and similar terminology, including references to assumptions. Please note, however, that not all forward-looking information contains these terms and phrases. Forward-looking information is based upon a number of assumptions and is subject to a number of risks and uncertainties, many of which are beyond Stingray's control. These risks and uncertainties could cause actual results to differ materially from those that are disclosed in or implied by such forward-looking information. These risks and uncertainties include, but are not limited to, the risk factors identified in Stingray's Annual Information Form for the year ended
Non-IFRS Measures
The Corporation believes that Adjusted EBITDA and Adjusted EBITDA margin are important measures when analyzing its operating profitability without being influenced by financing decisions, non-cash items and income taxes strategies. Comparison with peers is also easier as companies rarely have the same capital and financing structure. The Corporation believes that Adjusted net income and Adjusted net income per share are important measures as it demonstrates its core bottom-line profitability. The Corporation believes that Adjusted free cash flow is an important measure when assessing the amount of cash generated after accounting for capital expenditures and non-core charges. It demonstrates cash available to make business acquisitions, pay dividend and reduce debt. The Corporation believes that Net debt and Net debt to Adjusted EBITDA are important measures when analyzing the significance of debt on the Corporation’s statement of financial position. Each of these non-IFRS financial measures is not an earnings or cash flow measure recognized by IFRS and does not have a standardized meaning prescribed by IFRS.
Our method of calculating such financial measures may differ from the methods used by other issuers and, accordingly, our definition of these non-IFRS financial measures may not be comparable to similar measures presented by other issuers. Investors are cautioned that non-IFRS financial measures should not be construed as an alternative to net income determined in accordance with IFRS as indicators of our performance or to cash flows from operating activities as measures of liquidity and cash flows.
Adjusted EBITDA and Adjusted Net income reconciliation to Net income
3 months | 6 months | ||||||||
(in thousands of Canadian dollars) | 2020 Q2 2021 | 2019 Q2 2020 | 2020 YTD 2021 | 2019 YTD 2020 | |||||
Net income | 11,888 | 5,184 | 18,909 | 14,367 | |||||
Net finance expense (income) | 2,774 | 6,362 | 7,375 | 13,742 | |||||
Change in fair value of investments | 461 | (188 | ) | 1,353 | 145 | ||||
Income taxes | 4,654 | 2,479 | 7,013 | 3,960 | |||||
Depreciation and write-off of property and equipment | 2,976 | 2,989 | 5,677 | 5,811 | |||||
Depreciation of right-of-use assets | 1,413 | 1,419 | 2,825 | 2,790 | |||||
Amortization of intangible assets | 5,188 | 5,935 | 10,598 | 12,054 | |||||
Share-based compensation | 219 | 257 | 385 | 505 | |||||
Performance and deferred share unit expense | 1,312 | 794 | 2,628 | 1,575 | |||||
Acquisition, legal, restructuring and other expenses (income) | 271 | 2,440 | (126 | ) | 3,887 | ||||
Adjusted EBITDA | 31,156 | 27,671 | 56,637 | 58,836 | |||||
Net finance expense (income), excluding mark-to-market losses (gains) on derivative financial instruments | (4,340 | ) | (5,767 | ) | (7,678 | ) | (11,962 | ) | |
Income taxes | (4,654 | ) | (2,479 | ) | (7,013 | ) | (3,960 | ) | |
Depreciation of property and equipment and write-off | (2,976 | ) | (2,989 | ) | (5,677 | ) | (5,811 | ) | |
Depreciation of right-of-use assets | (1,413 | ) | (1,419 | ) | (2,825 | ) | (2,790 | ) | |
Income taxes related to change in fair value of investments, share-based compensation, performance and deferred share unit expense, amortization of intangible assets, CRTC Tangible benefits, mark-to-market losses (gains) on derivative financial instruments and acquisition, legal, restructuring and other expenses (income) | (1,462 | ) | (2,601 | ) | (3,624 | ) | (5,210 | ) | |
Adjusted Net income | 16,311 | 12,416 | 29,820 | 29,103 | |||||
Adjusted free cash flow reconciliation to Cash flow from operating activities
3 months | 6 months | ||||||||
(in thousands of Canadian dollars) | 2020 Q2 2021 | 2019 Q2 2020 | 2020 YTD 2021 | 2019 YTD 2020 | |||||
Cash flow from operating activities | 25,406 | 18,952 | 63,399 | 45,250 | |||||
Add / Less : | |||||||||
Acquisition of property and equipment | (1,209 | ) | (1,459 | ) | (1,912 | ) | (3,072 | ) | |
Acquisition of intangible assets other than internally developed intangible assets | (212 | ) | (292 | ) | (470 | ) | (811 | ) | |
Addition to internally developed intangible assets | (1,671 | ) | (1,559 | ) | (3,223 | ) | (3,082 | ) | |
Interest paid | (2,912 | ) | (4,493 | ) | (6,599 | ) | (9,473 | ) | |
Repayment of lease liabilities | (1,443 | ) | (1,303 | ) | (2,657 | ) | (2,398 | ) | |
Net change in non-cash operating working capital items | 6,530 | 6,143 | (4,882 | ) | 8,271 | ||||
Unrealized loss on foreign exchange | (1,899 | ) | 327 | (2,624 | ) | 771 | |||
Acquisition, legal, restructuring and other expenses (income) | 271 | 2,440 | (126 | ) | 3,887 | ||||
Adjusted free cash flow | 22,861 | 18,756 | 40,906 | 39,343 | |||||
Note to readers: Annual consolidated financial statements and Management’s Discussion & Analysis of Operating Results and Financial Position are available on the Corporation’s website at www.stingray.com and on SEDAR at www.sedar.com.
Contact information:
Mathieu Péloquin
Senior Vice-President,
Stingray
(514) 664-1244, ext. 2362
mpeloquin@stingray.com
Source:
2020 GlobeNewswire, Inc., source