Press releasesAugust 12, 2015
Stingray Digital Group Inc. (TSX:RAY.A)(TSX:RAY.B) (the “Corporation”; “Stingray”), a leading business-to-business multi-platform music and in-store media solutions provider, today announced its financial results for the first quarter ended June 30, 2015.
“We are very pleased with our results for the first quarter, as revenues and Adjusted EBITDA increased by 27.3% and 22.8% respectively. These are the first results we are reporting since becoming a public company. Clearly we have started our new fiscal year on a solid note. Acquisitions, expansion in international markets and the launch of new products have enabled us to achieve record results in terms of revenues, Adjusted EBITDA and Adjusted free cash flow,” said Eric Boyko, President, CEO and co-founder of Stingray.
“The proceeds of the IPO have allowed us to significantly reduce our debt level. This combined with a new revolving credit facility of $100 million provides a solid financial position to pursue our acquisition program. Recently, we completed the acquisitions of Brava NL BV, Brava HDTV BV and Djazz TV BV, distributors of thematic channels dedicated to high-end music and cultural content distributed to an estimated 35 million subscribers in 50 countries in Europe, Africa, the Middle-East and the Caribbean.
“Going forward, we will continue to focus on the three main growth drivers which have been the basis for Stingray’s success: strategic acquisitions, diversification of our offering, and upselling to our existing clients. We remain confident in our ability to solidify our position as the leading B2B provider of quality music products and services,” concluded Mr. Boyko.
First Quarter Results
The Corporation generated record revenues of $19.9 million in the first quarter of 2016, an increase of 27.3% compared with revenues of $15.6 million a year ago. The increase was primarily due to acquisitions combined with significant growth in international markets and also the launch of new products.
Music Broadcasting saw an increase of 13.3% in revenues to $14.1 million mainly due to the signing of new customer contracts, such as AT&T, and the acquisitions of Telefonica On the Spot and Archibald Media Group. Commercial Music revenues increased 82.2% to $5.8 million, mainly as a result of the acquisitions of DMX Canada and Les Réseaux Urbains Viva Inc.
Adjusted EBITDA for the first quarter of 2016 was $7.2 million or 35.9% of revenues, compared to $5.8 million or 37.3% of revenues a year earlier. The increase was primarily due to the acquisitions in Fiscal 2015, growth in international markets and additional non-recurring revenues related to installation and equipment sales.
For the first quarter, the Corporation incurred a net loss of $1.8 million, or $0.05 per share (diluted), compared to a net income of $1.0 million, or $0.03 per share (diluted) for the same period in 2014. The loss was primarily due to costs related to the one-time IPO expenses and CRTC tangible benefits, and the related income tax impact.
Adjusted net income increased 33.2% to $4.8 million, or $0.12 per share (diluted), compared to $3.6 million, or $0.10 per share (diluted) a year ago. The increase was primarily due to the successful integration of Fiscal 2015 acquisitions combined with the signing of new international contracts, additional sales for installation and equipment and lower finance expenses.
Cash flow from operating activities was $4.1 million in the first quarter of 2016, versus $2.7 million a year earlier. Adjusted free cash flows for the three months ended June 30, 2015 increased 60.4% to $5.3 million, compared to $3.3 million for the same period a year ago.
As at June 30, 2015, the Corporation had cash and cash equivalents of $1.0 million and a revolving credit facility of $100.0 million, of which approximately $92.6 million was unused, allowing it to pursue strategic acquisitions and achieve its growth objectives.
Subsequent to Quarter-end
On July 23, 2015, the Corporation announced that it had agreed to acquire all of the issued and outstanding shares in the share capital of Brava NL BV, Brava HDTV BV and Djazz TV BV, distributors based in Amsterdam of three successful thematic channels dedicated to high-end music and cultural content available to an estimated 35 million subscribers in 50 countries in Europe, Africa, the Middle East and the Caribbean. The transaction was closed on July 31, 2015.
The all-cash transaction includes an initial payment of approximately $8-million (EUR6.1 million) plus potential earn-out and performance-based milestone payments totalling $3-million (EUR2.2 million). Under the terms of the agreement, Stingray will fully own and operate Brava NL, Brava HD and Djazz TV.
These three strategic acquisitions are anticipated to be accretive to Stingray’s earnings in the first year and will accelerate the Corporation’s presence in the global market while further diversifying its already comprehensive portfolio of products.
Additional Business Highlights
During the three-month period ended June 30, 2015, Stingray renewed important long-term contracts including Telus, Sobey’s and Cogeco. The Corporation launched Stingray Concert in Latin America, its first linear concert channel, Stingray Mobile in international markets in over 9 different languages and Stingray Music streaming service on the Sonos Wireless HiFi System.
For more details, please click here.
Stingray (TSX:RAY.A)(TSX:RAY.B) is a leading business-to-business multi-platform music and in-store media solutions provider operating on a global scale, reaching an estimated 135 million Pay-TV subscribers (or households) in 127 countries. Geared towards individuals and businesses alike, Stingray’s products include the following leading digital music and video services: Stingray Music, Stingray Concerts, Stingray Brava, Stingray Djazz, Stingray Music Videos, Stingray Lite TV, Stingray Ambiance and Stingray Karaoke. Stingray also offers various business solutions, including music and digital display-based solutions through its Stingray Business division. Stingray is headquartered in Montreal and currently has over 235 employees across the world, including in Toronto, Miami, London, Amsterdam and Tel Aviv. Stingray was recognized in 2013 and 2014 as a finalist in the Top 50 of Deloitte’s Technology Fast 50TM list, and figures amongst PROFIT magazine’s fastest-growing Canadian companies. For more information, please visit www.stingray.com.
– 30 –
Senior Vice-President, Marketing and Communications
Stingray Digital Group Inc.
(514) 664-1244, ext. 2362