TORONTO – Ad revenue growth among its specialty channels and the continued strong performance by the CSI franchise ensured Alliance Atlantis would finish 2005 strongly.
Consolidated EBITDA increased 42% for Q4 to $72.1 million, and 21% for the full year to $192.9 million Free cash flow of $63.6 million for Q4 and $120.1 million for the full year compares to $32.7 million and an outflow of $23.1 million in the same periods in the prior year, respectively. The company’s digital channels delivered positive contributions to EBITDA in Q4
During this morning’s conference call with financial analysts, CEO Phyllis Yaffe termed the results" fantastic."
"Advertising sales increased 20% in 2005," she added. Alliance Atlantis’ digital specialty channels (Showcase Action, Showcase Diva, BBC Kids, BBC Canada, National Geographic Channel, IFC Canada, Fine Living and Discovery Health) are beginning to show their future potential already. Of the total ad spend on the new channels launched in 1991, Alliance Atlantis channels is getting 48% of the revenue, said Yaffe.
With digital migration coming, the company is spending on marketing in order to build all of its brands to endure – when the time comes that customers can pick all channels one at a time, if they wish.
"We’re investing in strong brands to allow viewers to choose our channels because digital migration is the future… we’re looking forward to it.
The only troubling channel, said Yaffe, is Discovery Health, which is aimed at a female audience and she said the company has applied to the Commission to alter its license.
During the fourth quarter, the digital channels benefited from a 5% increase in subscribers compared to the third quarter and a 30% increase in subscribers year-over-year.
Additionally, the channels benefited from a retroactive adjustment payment of $2.3 million from one of the channels’ distributors (Shaw, reportedly). For the full year, broadcasting recorded revenue of $283.4 million representing an increase of 15% over the prior year driven by gains in advertising and subscriber revenue.
As for the company’s entertainment division, whose sole operation is producing the three CSI franchises, its rolling along dominantly. "(T)he CSI franchise continues to outperform our original revenue and cash flow expectations, and is benefiting from sustained ratings successes and strong sales around the world. In fact, CSI: Miami was named as the biggest hit TV series for 2005 on a global scale in a recent report [the Global TV Acquisitions report, Informa Telecoms & Media, February 15, 2006, is based on the number of times a free-to-air TV series was listed in year-end Top 10 rankings worldwide], a testament to the impact this series has had in international markets," Yaffe added.
