Stingray Group Inc. (TSX: RAY.A; RAY.B) (the “Corporation”;
“Stingray”), a leading distributor of audio and video music brands
in the world, today announced its financial results for the fourth
quarter and fiscal year ended March 31, 2022.
|
Financial Highlights(in thousands of Canadian
dollars, except per share data) |
Three months endedMarch 31 |
Twelve months endedMarch 31 |
|
|
2022 |
2021 |
% |
|
2022 |
2021 |
% |
|
|
Revenues |
72,644 |
59,740 |
21.6 |
|
282,626 |
247,857 |
14.0 |
|
|
Adjusted EBITDA(2) |
21,023 |
23,638 |
(11.1 |
) |
99,269 |
114,268 |
(13.1 |
) |
|
Net income |
4,466 |
12,077 |
(63.0 |
) |
33,287 |
45,104 |
(26.2 |
) |
|
Per share – diluted ($) |
0.06 |
0.17 |
(64.7 |
) |
0.47 |
0.61 |
(24.2 |
) |
|
Adjusted Net income(3) |
11,780 |
11,981 |
(1.7 |
) |
56,389 |
62,855 |
(10.3 |
) |
|
Per share – diluted ($)(3) |
0.17 |
0.16 |
6.3 |
|
0.79 |
0.86 |
(8.1 |
) |
|
Cash flow from operating activities |
22,127 |
24,514 |
(9.7 |
) |
83,663 |
104,246 |
(19.7 |
) |
|
Adjusted free cash flow(4) |
11,833 |
13,808 |
(14.3 |
) |
56,933 |
74,359 |
(23.4 |
) |
|
(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, one-time fees and discontinued
operations |
|
(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. |
|
(3) |
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, net of related income taxes. |
|
(4) |
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, and adjusted
for unrealized gain or loss on foreign exchange and for the net
change in non-cash working capital items. |
|
(5) |
Pro Forma Adjusted EBITDA is calculated as the Corporation’s last
twelve months Adjusted EBITDA, plus synergies and pro forma
Adjusted EBITDA for the months prior to the acquisitions which are
not already reflected in the results. |
Reporting on Stingray’s fiscal 2022 and fourth
quarter performance, President, Co-Founder and CEO Eric Boyko
stated: “We are encouraged by our fiscal 2022 results with revenues
increasing 14.0% to $282.6 million, reflecting a return to normal
business activities post-pandemic and the InStore Audio Network
acquisition. Although adjusted EBITDA declined 13.1% compared to
2021, when contributions from the Canadian Emergency Wage Subsidy
(CEWS) program are excluded, Adjusted EBITDA actually increased. We
also continued investing in high-growth areas, notably in Retail
Media. As always, our capital allocation strategy rewarded
shareholders by returning more than $36 million to them in the form
of shares repurchased and dividends.”
“In the fourth quarter of 2022, our revenues
improved 21.6% to $72.6 million largely due to the same factors
impacting full-year results, along with an increase in equipment
and installation sales related to digital signage. Adjusted EBITDA
in the fourth quarter declined 11.1% mainly due to lower CEWS and
higher operating costs related to a return to normal commercial
operations.”
“Turning to our Broadcasting and Commercial
Music business, revenue grew 6.0% in 2022, driven by the Calm Radio
and InStore Audio Network acquisitions. The Retail Media segment
holds much promise for fiscal 2023 based on growing demand for
highly customizable audio ads within Retail Media and recent
partnerships announced with Walmart Canada and Metro Inc. Under the
agreement with Walmart Canada, Stingray is providing digital
in-store audio advertising capabilities to boost the retail giant’s
influence with the 1.5 million shoppers who visit its 400 stores
daily across Canada. Similarly, Stingray’s audio ads will enable
Metro to connect and remain top-of-mind with discerning consumers
during their in-store shopping experience within the approximately
1,100 Metro network of grocery stores and pharmacies.”
“Free ad-supported TV (FAST) represents another
key growth vehicle for Stingray’s Broadcasting and Commercial Music
segment. During the fourth quarter, we launched 17 FAST channels on
the streaming platform Galaxy TV in Canada and the United States.
Likewise, we announced a FAST channel distribution agreement with
TCL Electronics for its smart TVs in Australia, Brazil, India,
Mexico and the United States after the year-end. As part of the
deal, TCL will make available advertising-based, video-on-demand
(AVOD) packages to viewers, including karaoke and concerts combined
with beautiful imagery from the four corners of the globe. As a
result, we’re targeting strong revenue opportunities in FAST
channels as TV viewing habits evolve.”
“During the past year, the Radio segment
continued its recovery, despite softness in some traditional
end-markets that have not fully resumed advertising spending. Our
radio network performed relatively well in local markets with
growth in digital radio providing incremental revenue. As a result,
radio revenues improved 26.3% year-over-year. We are pleased by the
overall performance of our Radio business, in particular the strong
cash flow it generates.”
“Following a year of transition, we look forward
to fiscal 2023 as we invest in key, high-growth vectors such as
Retail Media, FAST channels, Chatter and the automobile sector. Our
capital allocation strategy will be striking a balance between
returning money to shareholders, and continuing to reduce our
debt,” Mr. Boyko concluded.
Fourth Quarter ResultsRevenues
in the fourth quarter increased $12.9 million, or 21.6%, to $72.6
million from $59.7 million in the fourth quarter of 2021. The
increase was primarily due to the acquisition of InStore Audio
Network, gradual easing of COVID-19 restrictions and the return to
normal commercial operations, as well as an increase in equipment
and installation sales related to digital signage.
Revenues in Canada improved $5.0 million, or
13.7%, to $40.5 million from $35.5 million in the same period in
2021. The growth was primarily due to the gradual easing of
COVID-19 restrictions and the return to normal commercial
operations. Revenues in the United States surged $8.7 million, or
84.7%, to $19.1 million from $10.4 million a year ago. The increase
was primarily due the acquisition of InStore Audio Network and to
additional subscription revenues. Revenues in Other countries
declined $0.8 million, or 5.3%, to $13.0 million from $13.8 million
in the fourth quarter of 2021. The decrease can be attributed to a
negative foreign exchange rate impact.
Broadcasting and Commercial Music revenues in
the fourth quarter of 2022 increased $9.8 million, or 27.4%, to
$45.6 million from $35.8 million in the fourth quarter of 2021. The
growth was driven by the acquisition of InStore Audio Network and
additional subscription revenues.
For the fourth quarter of 2022, Radio revenues
grew $3.1 million, or 12.9%, to $27.1 million from $24.0 million in
the same period of 2021. This increase was largely due to the
gradual easing of COVID-19 restrictions and return to normal
commercial operations.
Adjusted EBITDA in the fourth quarter of 2022
decreased $2.6 million, or 11.1%, to $21.0 million from $23.6
million in the fourth quarter of 2021. Adjusted EBITDA margin in
the fourth quarter of 2022 reached 28.9% compared to 39.6% in the
same period last year. The decrease can be attributed to lower CEWS
and higher operating costs due to the return to normal commercial
operations. These factors were partially offset by higher revenues
in the Radio segment and by the acquisition of InStore Audio
Network.
For the fourth quarter of 2022, net income
totaled $4.5 million ($0.06 per share) compared to $12.1 million
($0.17 per share) in the fourth quarter of 2021. The decrease was
mainly related to a lower gain on derivative financial instruments
and a foreign exchange loss, partially offset by a lower income tax
expense. Adjusted net income amounted to $11.8 million ($0.17 per
share) in the fourth quarter compared to $12.0 million ($0.16 per
share) in the same period last year. The decrease was mainly caused
by a lower gain on foreign exchange, partially offset by a decrease
in the fair value of contingent consideration.
Cash flow generated from operating activities
amounted to $22.1 million in the fourth quarter of 2022 compared to
$24.5 million in the fourth quarter of 2021. The decrease can be
attributed to higher restructuring and other expenses, lower
foreign exchange gain as well as lower operating results. These
factors were partially offset by the positive change in non-cash
operating items. Adjusted free cash flow generated in the fourth
quarter of 2022 totaled $11.8 million compared to $13.8 million in
the same period last year. The decrease was mainly related to lower
operating results, partially offset by lower interest paid.
As of March 31, 2022, the Corporation had cash
and cash equivalents of $14.6 million, subordinated debt of $25.4
million and credit facilities of $358.2 million, of which
approximately $78.7 million was available.
Year-End ResultsFiscal 2022
revenues increased $34.7 million, or 14.0%, to $282.6 million from
$247.9 million in fiscal 2021. The increase was primarily due to
gradual easing of COVID-19 restrictions and return to normal
commercial operations and to the acquisition of InStore Audio
Network.
Adjusted EBITDA in fiscal 2022 decreased $15.0
million, or 13.1%, to $99.3 million from $114.3 million in fiscal
2021. Adjusted EBITDA margin in fiscal 2022 reached 35.1% compared
to 46.1% in 2021. The decline in adjusted EBITDA can be attributed
to lower CEWS and higher operating costs, partially offset by
higher revenues in the Radio segment, all caused by the gradual
easing of COVID-19 restrictions and return to normal commercial
operations.
Net income in fiscal 2022 totaled $33.3 million
($0.47 per share) compared to $45.1 million ($0.61 per share) in
fiscal 2021. The decrease was mainly related to lower operating
results, reduced gain on derivative financial instruments and a
foreign exchange loss. These factors were partially offset by a
decrease in the fair value of contingent consideration, lower
income tax expense and by a loss on the fair value of investment in
Fiscal 2021.
Adjusted net income in fiscal 2022 amounted to
$56.4 million ($0.79 per share) compared to $62.9 million ($0.86
per share) in fiscal 2021. The decline was mostly related to lower
operating results and foreign exchange loss; these factors were
partially offset by a decrease in the fair value of contingent
consideration, lower income tax expense and reduced interest
expense.
Declaration of DividendThe
Corporation declared a dividend of $0.075 per subordinate voting
share, variable subordinate voting share and multiple voting share
on March 23, 2022. The dividend will be payable on or around June
15, 2022, to shareholders on record as of May 31, 2022.
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 (Canada) and any
corresponding provisions of provincial and territorial tax
legislation.
Additional Business Highlights and
Subsequent Events
- On May 12,
2022, the Corporation announced that METRO Inc has joined the
Stingray Retail Media Network. Under the agreement, Stingray will
be responsible for exclusive sales representation of all in-store
digital audio advertising within approximately 1,100 METRO network
of food stores under several banners in Quebec and Ontario
including Metro, Metro Plus, Super C and Food Basics, as well as
drugstores primarily under Jean Coutu and Brunet, Metro Pharmacy
and Food Basics Pharmacy banners.
- On April 20,
2022, the Corporation announced that it has reached an agreement
for the distribution of a suite of free ad-supported channels (FAST
channels) to TCL smart TVs in Australia, Brazil, India, Mexico and
the United States. The new services within the TCL app include
Qello Concerts by Stingray, Stingray Karaoke, Stingray Classica,
Stingray DJAZZ, Stingray CMusic, Stingray Naturescape and Stingray
Music channels for users to access at no extra cost.
- On April 19,
2022, the Corporation announced that that Walmart Canada has joined
the Stingray Retail Media Network. Under the agreement, Stingray
will be responsible for exclusive sales representation, in
partnership with the Walmart Connect sales team, of all in-store
digital audio advertising within the national Walmart Canada retail
footprint.
- On April 6,
2022, the Corporation launched Stingray All Good Vibes channels
with Amazon’s Prime Video Channels in Australia, a paid add-on
subscription exclusive to Prime members. Prime members now have
access to subscribe to Qello Concerts by Stingray, Stingray
Karaoke, Stingray Classica, Stingray DJAZZ, and Stingray
Naturescape. The launch showcased the quality and diversity of
Stingray's growing product portfolio and its strength in reaching
new audiences.
- On March 23,
2022, the Corporation declared a dividend of $0.075 per subordinate
voting share, variable subordinate voting share and multiple voting
share. The dividend will be payable on or around June 15, 2022, to
shareholders on record as of May 31, 2022.
- On March 14,
2022, the Corporation announced that it has launched 17 free
ad-supported channels (FAST channels) on the streaming platform
Galxy TV in Canada and the United States.
- On March 1,
2022, the Corporation announced a partnership with Leger, the
largest Canadian-owned market research and analytics firm, to
measure the effectiveness of retail-based digital audio advertising
in Canada. Leger will conduct surveys to demonstrate that
advertising campaigns connected to the Stingray Retail Media
Network drive tangible results.
- On February 23,
2022, the Corporation announced a partnership with TikTok, the
leading destination for short-form mobile video, to launch TikTok
Radio. The collaboration will bring TikTok’s top trending music and
artists to Stingray’s ever-growing audience across multiple
platforms.
- On February 8,
2022, the Corporation declared a dividend of $0.075 per subordinate
voting share, variable subordinate voting share and multiple voting
share. The dividend was paid on March 15, 2022, to shareholders on
record as of February 28, 2022.
- On January 5,
2022, the Corporation announced that it had acquired InStore Audio
Network, the largest in-store audio advertising network in the
United States, reaching 100 million shoppers each week in over
16,000 grocery retailers and pharmacies across the US for total
consideration of up to approximately $59.0 million subject to a
specific earn out mechanism set forth in the purchase
agreement
Conference CallThe Corporation
will hold a conference call to review its financial results on
Wednesday, June 8, 2022, at 10:00 AM (ET). Interested parties can
join the call by dialing 416-764-8658 (Toronto) or 1-888-886-7786
(toll free). A rebroadcast of the conference call will be available
until midnight, July 20, 2022, by dialing 416-764-8692 or
877-674-7070 and entering passcode 802468.
About StingrayMontreal-based
Stingray (TSX: RAY.A; RAY.B) is a leading global music, media, and
technology company with over 1,000 employees worldwide. Stingray is
a premium provider of curated direct-to-consumer and B2B services,
including audio television channels, over 100 radio stations, SVOD
content, 4K UHD television channels, FAST channels, karaoke
products, digital signage, in-store music, and music apps, which
have been downloaded over 160 million times. Stingray reaches 400
million subscribers (or users) in 160 countries.
Forward-Looking InformationThis
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 March 31, 2022, which is available on SEDAR at
www.sedar.com. Consequently, all of the forward-looking information
contained herein is qualified by the foregoing cautionary
statements, and there can be no guarantee that the results or
developments that Stingray anticipates will be realized or, even if
substantially realized, that they will have the expected
consequences or effects on Stingray's business, financial condition
or results of operation. Unless otherwise noted or the context
otherwise indicates, the forward-looking information contained
herein is provided as of the date hereof, and Stingray does not
undertake to update or amend such forward-looking information
whether as a result of new information, future events or otherwise,
except as may be required by applicable law.
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 shows stable results from its operation which allows users of
the financial statements to better assess the trend in the
profitability of the business. The Corporation believes that
Adjusted free cash flow and Adjusted free cash flow per share are
important measures 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 Pro Forma Adjusted EBITDA are important to analyse
the company's debt repayment capacity on an annualized basis,
taking into consideration the annualized adjusted EBITDA of
acquisitions made during the last twelve months. Each of these
non-IFRS financial measures is not an earnings or cash flow measure
recognized by International Financial Reporting Standards (IFRS)
and does not have a standardized meaning prescribed by IFRS. This
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 |
|
12 months |
| (in
thousands of Canadian dollars) |
March 31,2022Q4 2022 |
|
March 31,2021Q4 2021 |
|
|
March 31,2022Fiscal 2022 |
|
March 31,2021Fiscal 2021 |
|
|
Net income |
4,466 |
|
12,077 |
|
|
33,287 |
|
45,104 |
|
| Net finance expense (income) |
(769 |
) |
(7,284 |
) |
|
6,119 |
|
(1,199 |
) |
| Change in fair value of
investments |
12 |
|
– |
|
|
2 |
|
3,787 |
|
| Income taxes |
191 |
|
4,047 |
|
|
9,013 |
|
15,960 |
|
| Depreciation and write-off of
property and equipment |
3,862 |
|
3,082 |
|
|
11,069 |
|
11,653 |
|
| Depreciation of right-of-use
assets |
1,201 |
|
1,436 |
|
|
5,076 |
|
5,660 |
|
| Amortization of intangible
assets |
4,176 |
|
5,303 |
|
|
19,399 |
|
21,379 |
|
| Share-based compensation |
222 |
|
235 |
|
|
798 |
|
851 |
|
| Performance and deferred share
unit expense |
1,750 |
|
2,028 |
|
|
5,799 |
|
6,436 |
|
|
Acquisition, legal, restructuring and other expenses (income) |
5,912 |
|
2,714 |
|
|
8,707 |
|
4,637 |
|
|
Adjusted EBITDA |
21,023 |
|
23,638 |
|
|
99,269 |
|
114,268 |
|
| Net
finance expense (income), excluding mark-to-market losses (gains)
on derivative financial instruments |
(1,381 |
) |
(3,214 |
) |
|
(9,516 |
) |
(12,619 |
) |
| Income taxes |
(191 |
) |
(4,047 |
) |
|
(9,013 |
) |
(15,960 |
) |
| Depreciation of property and
equipment and write-off |
(3,862 |
) |
(3,082 |
) |
|
(11,069 |
) |
(11,653 |
) |
| Depreciation of right-of-use
assets |
(1,201 |
) |
(1,436 |
) |
|
(5,076 |
) |
(5,660 |
) |
|
Income taxes related to change in fair value of investments,
share-based compensation, performance and deferred share unit
expense, amortization of intangible assets, mark-to-market losses
(gains) on derivative financial instruments and acquisition, legal,
restructuring and other expenses (income) |
(2,608 |
) |
122 |
|
|
(8,206 |
) |
(5,521 |
) |
|
Adjusted Net income |
11,780 |
|
11,981 |
|
|
56,389 |
|
62,855 |
|
Adjusted Free Cash Flow Reconciliation
to Cash Flow from Operating Activities
| |
3 months |
|
12 months |
|
(in thousands of Canadian dollars) |
March 31,2022Q4 2022 |
|
March 31,2021Q4 2021 |
|
|
March 31,2022Fiscal 2022 |
|
March 31,2021Fiscal 2021 |
|
|
Cash flow from operating activities |
22,127 |
|
24,514 |
|
|
83,663 |
|
104,246 |
|
| Add / Less : |
|
|
|
|
|
| Acquisition of property and
equipment |
(2,443 |
) |
(1,929 |
) |
|
(9,061 |
) |
(5,690 |
) |
| Acquisition of intangible assets
other than internally developed intangible assets |
(355 |
) |
(194 |
) |
|
(1,134 |
) |
(1,313 |
) |
| Addition to internally developed
intangible assets |
(593 |
) |
(1,367 |
) |
|
(6,854 |
) |
(6,428 |
) |
| Interest paid |
(3,391 |
) |
(5,142 |
) |
|
(14,384 |
) |
(18,053 |
) |
| Repayment of lease
liabilities |
(1,074 |
) |
(1,099 |
) |
|
(4,815 |
) |
(5,011 |
) |
| Net change in non-cash operating
working capital items |
(7,571 |
) |
(344 |
) |
|
24 |
|
10,632 |
|
| Unrealized loss (gain) on foreign
exchange |
(779 |
) |
(3,345 |
) |
|
787 |
|
(8,661 |
) |
|
Acquisition, legal, restructuring and other expenses (income) |
5,912 |
|
2,714 |
|
|
8,707 |
|
4,637 |
|
|
Adjusted free cash flow |
11,833 |
|
13,808 |
|
|
56,933 |
|
74,359 |
|
Pro Forma Adjusted EBITDA
Reconciliation
|
(in thousands of Canadian dollars) |
March 31, 2022 |
March 31,2021 |
| LTM
Adjusted EBITDA(2) |
99,269 |
114,268 |
| Synergies and Adjusted EBITDA(2)
for the months prior to the business acquisitions which are not
already reflected in the results |
16,000 |
190 |
|
COVID-19 credits allocated due to mandated store closures |
1,535 |
1,825 |
|
Pro Forma Adjusted
EBITDA(5) |
116,804 |
116,283 |
|
Net debt to Pro Forma Adjusted
EBITDA(5) |
3.16 |
2.81 |
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 InformationMathieu
PéloquinSenior Vice-President, Marketing and
CommunicationsStingray(514) 664-1244, ext.
2362mpeloquin@stingray.com
Stingray (TSX:RAY.B)
Graphique Historique de l'Action
De Nov 2024 à Déc 2024
Stingray (TSX:RAY.B)
Graphique Historique de l'Action
De Déc 2023 à Déc 2024
