Debt refinancing results in $4.9-million loss at SiriusXM Canada

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TORONTO – The parent of Sirius XM Canada posted a $4.9-million net loss in its fiscal third quarter after accounting for a debt refinancing that will provide the company with better interest rates and more flexible covenants over the next few years.

The loss, equal to about four cents per share, was partially reduced by contract renewals with Ford and Honda, which factory-install the company’s satellite radio receivers.

A year earlier, the company had a profit of one cent per share or $776,119.

The Toronto-based company recorded a $16.6-million charge related to the debt refinancing. Excluding the refinancing, contract adjustments and other items, adjusted EBITDA was $22.7 million, or $18.09 million — up from $15.08 million in the third quarter of fiscal 2013.

Sirius XM Canada Holdings Inc. (TSX:XSR) says its revenue for the quarter was $74.48 million, up 1.2 per cent from a year earlier — a smaller increase than would have occurred under the old contracts, which had different subsidies and revenue-sharing rates.

Its revenue in the three months ended May 31 would otherwise have been $75.98 million under the previous contracts, or 3.3 per cent above a year earlier when SiriusXM’s revenue for the third quarter was $73.58 million.

During the quarter, the company also declared a special cash dividend of $75 million, or 58.5 cents per class A share, plus a quarterly dividend of $13.4 million or 10.5 cents per class A share.

At the end of the quarter, SiriusXM had 2.53 million subscribers, up from 2.32 million a year earlier and up 142,200 from the end of the previous quarter.

“Increasing our subscriber base, holding the line on costs and growing cash flow, remain our top priorities, and during the quarter we were successful in these areas,” said SiriusXM president and CEO Mark Redmond.

“We remain well positioned for future growth and view the OEM renewals during the quarter as clear evidence of the strong value they ascribe to our service.”

Note to readers: This is a corrected story. An earlier version attributed the loss to both the debt financing and the contract renewals

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