TORONTO – Canadian Satellite Radio Holdings reported a second quarter loss of $15.8 million Monday, an improvement over the same quarter of 2006.
In releasing its financial results, based on hitting 237,500 subscribers, the company reported revenue for the three-month period ending Feb. 28, 2007 of $4.9 million, also an improvement over the same quarter in 2006.
“We are pleased with our performance this quarter and are confirming our position as Canada’s premium digital audio entertainment and information company,” said John Bitove, CSR’s Chairman and CEO.
“We will continue to build our subscriber base through innovative partnerships such as our new agreement with Rogers Communications, which is another landmark deal for XM Canada and another first for the industry,” said Bitove. “Through an aggressive team effort, we are on track to reach one million subscribers by 2010.”
For the three-month period ended Feb. 28, XM Canada reported revenue of $4.9 million, an increase of 27% over the previous quarter and a 325% increase over the second quarter of 2006.
This increase in revenue is due to an overall increase in subscriptions, activation fees, sale of merchandise through its direct fulfillment channel, advertising revenue on Canadian-produced channels and other revenue from partnership subscribers, the company said in a statement.
Adjusted operating loss for the three-month period was $15.8 million, an improvement of $1.6 million over the second quarter of 2006. “Adjusted operating loss is expected to improve as we continue to grow our subscriber base and manage operating expenses,” it said.
For the second quarter, Average Revenue Per Unit (ARPU) was $10.90, a decrease of $1.11 from the second quarter of 2006. CSR incurred Subscriber Acquisition Costs (SAC) of $53 per gross addition, a decrease of $16 from the second quarter of 2006. Cost Per Gross Addition (CPGA) was $207, an increase of $13 over the second quarter of 2006.
ARPU and SAC decreased from the second quarter of 2006 due to a fiscal 2007 holiday promotion, which included service credits and hardware rebates that have been amortized over the term of the subscriber payment plan and were accounted for against revenue, as well as the introduction of multi-year plans during the summer of 2006.
SAC was improved by an increase in the subscriber additions through automotive partnerships. CPGA increased as a result of the company’s first full holiday season marketing campaign.
Operational expenses for the three-month period ended February 28, 2007 included general and administrative expenses of $4.1 million, marketing of $9.3 million and cost of revenue of $7.3 million.
“XM Canada is expanding rapidly across a number of platforms and changing the way that Canadians experience satellite radio,” Bitove added.
In an effort to align definitions more closely with industry norms, subscriber numbers now include vehicles factory-activated with the XM service whereby automakers have agreed to pay for a portion or all of the trial period service. Based on the new definitions, the total count was 237,500 subscribers as of February 28, 2007 which is comprised of 219,300 paying subscribers and 18,200 OEM promotional subscribers.
