Annual
Report
2023
Year Ended March 31, 2023
Stingray Group Inc.
Table of
contents
05
Word from the CEO
09
Word from the Chairman
10
10
12
16
18
Management’s Discussion and Analysis
Company Profile
Products
Current Company Goals
Proven Acquisition Strategy
20
Competitive Strengths
22
24
25
58
Key Business Risks
Executive Officers
Non-executive Directors
Consolidated Financial Statements
Glossary of Terms
Word from
the CEO
Eric Boyko
President, Co-founder
and CEO
Dear investors, partners, clients and
colleagues,
Against a backdrop of economic uncertainty, Stingray
bucked the trend in FY 2023. Despite economic
headwinds, we had a banner year and maintained
an exemplary growth trajectory in the face of market
turbulence.
We are very proud to report that revenues are up by
14.6% compared to the previous year. Revenues stood
at $323.9 million, Adjusted EBITDA(1) was $114.1 million
and net income was $30.1 million ($0.43 per share).
Cash flow from operating activities was $86.9 million
and Adjusted free cash flow(1) was 63.7 million.
We owe much of our success to our incredible ability
to grow and shift alongside market trends. This past
fiscal year, we continued to pivot our product offerings
to become a leader in ad-supported music channels,
ad-supported video channels, and connected car
innovations. We also doubled down on our stake
in the connected TV market by distributing even
more channels over Free, Ad-Supported Streaming
Television (FAST) across Canada, the United States,
Europe and Latin America.
Building upon our acquisition last year of the U.S.-
based retail media provider, In-Store Audio Network
(ISAN), we continued our foray into the world of retail
media. This burgeoning corner of the advertising
market is growing at break-neck speed, and Stingray
is perfectly positioned to leverage its in-store audio
infrastructure to deliver proximity-based audio ads.
We are also putting the pedal to the metal in the
connected car space - another sector experiencing
tremendous growth. A successful collaboration with
Tesla centred on Stingray Karaoke has paved the way
for new automotive partnerships, with a particular
focus on electric vehicle manufacturers.
(1) This is a non-IFRS measure and is not a standardized financial measure. Our 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. Refer to “Supplemental Information on Non-IFRS Measures” on page 31
for more information on each non-IFRS measure and for reconciliations to the most directly comparable IFRS financial measure, refer
to “Non-IFRS Measures Reconciliations” on page 33 and “Reconciliation of Quarterly Non-IFRS Measures” on page 43.
Annual Report 2023 | Stingray Group Inc. | 5
The streaming revolution
Streaming Video on Demand (SVOD) has been
experiencing remarkable growth with a projected
increase of 65% from 2020 to 2026(2), hitting a
whopping 1.5 billion subscriptions by the end of this
period. Stingray seized this opportunity by focusing
attention on profitable SVOD products and B2B2C
distribution. Our approach will continue to favor
partnership acquisition over direct paid acquisition
models.
As we grow our B2B2C streaming subscription base,
we will also continue leveraging global relationships
with Amazon to break into new markets and launch
new products. In April 2022, Stingray added its All
Good Vibes channels to Amazon Prime Australia as
a paid add-on subscription.
On the other side of the world, we also launched
Stingray Karaoke and Qello Concerts on Claro Música
in Latin America. Every Samsung Smart TV in the world
is now enabled with Stingray Karaoke, and Verizon
+play now includes access to Qello as well.
Most recently, at the tail end of FY 2023, we brought
Stingray Classica and Qello Concerts to YouTube
TV. No matter the platform or SVOD offering, it’s all
systems go.
A new way to advertise on TV
In the United States, the connected TV advertising
spend is anticipated to reach $18 billion by 2026,
demonstrating a steady CAGR of 8.1%. Free Ad-
Supported Streaming Television (FAST) business also
shows exceptional growth potential, with revenue
from FAST channels expected to surpass $10 billion
by 2027(2).
We are harnessing these opportunities by distributing
FAST channels across Canada, the United States,
Europe, and Latin America. Using Over-the-Top (OTT)
advertising, we can reach 100s of millions of engaged
TV viewers, in addition to leveraging the largest music
channel library in the world.
Some of our most notable FAST partnerships of FY
2023 include a distribution agreement with TCL
FALCON for all their Smart TVs, a global distribution
deal with LG, and partnerships with Amazon Freevee
and Samsung TV Plus.
In a continued demonstration of our commitment to
innovation and audience engagement, we are excited
to announce our latest venture: Ultimate Trivia by
Stingray, which promises to deliver a captivating
and interactive experience for trivia buffs of all ages.
Initially launched as an ad-supported linear channel,
Ultimate Trivia is the world's only FAST channel
dedicated to trivia, providing an endless stream of
questions across a wide range of categories and
themes.
Accelerating our connected car
partnerships
Building off our success in FY 2022, we made further
inroads in the fast-growing connected car space
throughout FY 2023. Not only have we continued
our alliance with Tesla, one of our key automotive
partners, but we have also brought Stingray Karaoke
to VinFast, an emerging electric vehicle manufacturer.
Speaking of old friends, Stingray announced a major
launch with The Singing Machine in early 2023: the
world’s first fully-integrated hardware and software
in-car karaoke solution for the global automotive
market. This integration couples a fully integrated
microphone with our in-car karaoke app, as well as
voice-enhancing technology, and integrates essential
safety features.
We also signed a global deal with Harman, a leading
connected car technology company, and CARIAD,
Volkswagen Group’s software company, to bring
Stingray Karaoke to selected Audi vehicles world-
wide. We envision many more integrations of this
kind in the future.
(2) Digital TV Research
Annual Report 2023 | Stingray Group Inc. | 6
What’s new with Stingray Business
This sector of our company has grown in directions
we never would have imagined possible. As of FY
2023, Stingray Business is powering in-store brand
experiences for more than 140,000 locations across
the globe – not to mention our countless e-commerce
partners.
This existing network has been the ultimate springboard
for further solutions developments, most notably
Stingray Advertising: a revenue-generating vector
for retailers and brands that’s exploding in popularity.
By leveraging the in-store music infrastructure that’s
already in place, we can seamlessly integrate digital
audio advertising capabilities to drive new ad-based
revenue streams for our retail and commercial
partners.
Building on our success with retail-based technol-
ogies, Chatter – the consumer insights arm of our
business – has also picked up steam. FY 2023 was
punctuated by partnerships with major brands across
a variety of retail verticals, growing its network to
more than 3,000 locations across North America. This
year, Chatter onboarded in-store partners including
Driven Brands, Lowe’s, Mary Brown’s, and Fleet Feet,
and made headway in the e-commerce space with
household names like JCrew.com and Madewell.com.
Breaking new ground with Stingray
Advertising
In recent times, out-of-home (OOH) advertising and
retail media has emerged as a new form of adverti-
sing that has caught the markets’ attention. Stingray
responded to this development with exceptional speed
and agility, and FY 2023 was defined in large part by
Stingray Advertising.
This business unit represents North America’s largest
in-store advertising network. In an exceptionally short
period of time, we have grown from a nascent sector
of the business to a major industry player spanning
more than 20,000 locations across North America.
The allure of digital audio advertising is undeniable
for retailers, who are enticed by the concept of turn-
ing their stores into media channels. In FY 2023, we
welcomed Walmart, Metro Inc., and Familiprix into
our network. We have absolutely no doubt that this
is just the beginning of a remarkable trend in the
OOH market.
To support our growth and lead further expansion
throughout the United States, Stingray Advertising is
growing its sales force, adding experienced individuals
with extensive backgrounds in media, advertising,
and partnerships. Speaking of partnerships, we
joined forces with two key players in out-of-home
audio space that catapulted Stingray Advertising
into pioneer territory. Thanks to a collaboration with
Geopath, a leading audience measurement company,
we are giving brands a way to measure OOH audio
impressions for the very first time. We also partnered
up with Hivestack, the world’s largest, independent,
programmatic OOH ad tech company. Together,
we are making retail audio advertising inventory
available programmatically for the first time in the
United States, Mexico, and Australia.
The future looks bright
In the past fiscal year, Stingray withstood challenging
market conditions and emerged stronger. That’s no
coincidence: as the age-old proverb goes, sticks in a
bundle are unbreakable. Our relentless, hard-working
team is the real hero of this story, coupled with an
outstanding executive team and investors who share
our bold vision for the future.
Stingray has weathered a global pandemic. We’ve
expertly navigated the ups and downs of a turbu-
lent, unpredictable, and downright hostile economy.
Whatever we do, we do with guts and gusto – and I
speak for my entire team when I say we’re stronger
and more optimistic than ever.
Sincerely,
Annual Report 2023 | Stingray Group Inc. | 7
Word from
the Chairman
Mark Pathy
Chairman of the Board
The retail-based digital audio advertising arm of
our business uses this very same infrastructure to
deliver in-store ads, which have already proven to be a
significant driver for sales and brand awareness. Since
retailers receive compensation for each campaign
that we run in-store, it’s been smooth sailing for our
network development among both existing and new
retail partners.
Last year, I spoke about our impressive agility in the
wake of the pandemic. Today, I’d like to underscore that
our agile approach goes beyond our ability to react
quickly to changing circumstances - it’s embedded
in our DNA, from our processes to our people to our
vision for progress.
To the executive team and our board members – thank
you for your leadership and guidance. To our teams
on the ground – without you, not a single thing I've
mentioned would have been possible. You are key to
executing our strategy and vision.
Here's to another year of bold innovation, strategic
partnerships, and continued growth.
The past year's economic events have rocked many
businesses. Widespread layoffs throughout the tech
sector, plummeting stock prices, the threat of looming
recession – not a business environment for the faint of
heart. But Stingray has weathered the storm, buoyed
by its legacy brand experience and a commitment to
customer service.
Before getting into a few of FY 2023’s greatest hits,
I’d like to underscore a very important consideration.
The most exciting part about Stingray’s growth is that
we've only scratched the surface. Each of Stingray’s
business vectors hold meaningful potential for even
greater business opportunities and better returns.
This year, we were excited to deepen our relationship
with a legacy partner. The addition of Stingray’s All
Good Vibes channel to Amazon Prime Australia and
a FAST channel collaboration with Amazon Freevee
represents the next chapter in what we envision to
be a long-term strategic partnership with one of the
world’s most recognized brands.
Building on our strategic alliances, we doubled down
on our relationship with Tesla in FY 2023, taking an even
bigger bite out of the thriving connected car space.
New ventures with Vinfast and Audi have underscored
our value-add to cutting-edge car manufacturers.
As Stingray continues to broaden its horizons in new
markets, we are also leveraging a growing gem in our
portfolio - in-store music – to propel us even further.
Stingray Business is already present in 140,000
locations across North America, giving us a major foot
in the door for the development of Stingray Advertising.
Annual Report 2023 | Stingray Group Inc. | 9
Management's
Discussion
and Analysis
The following is the annual report and Management’s Discussion
and Analysis (“MD&A”) of the results of operations and financial
position of Stingray Group Inc. (“Stingray” or “the Corporation”)
and should be read in conjunction with the Corporation’s
consolidated audited financial statements and accompanying
notes for the years ended March 31, 2023 and 2022. This MD&A
reflects information available to the Corporation as of June 6,
2023. Additional information relating to the Corporation is also
available on SEDAR at www.sedar.com.
Company
Profile
Stingray (TSX: RAY.A; RAY.B), a global music, media, and
technology company, is an industry leader in TV broadcasting,
streaming, radio, business services, and advertising. Stingray
provides an array of music, digital, and advertising services to
enterprise brands worldwide, including audio and video channels,
over 100 radio stations, subscription video-on-demand content,
FAST channels, karaoke products and music apps, and in-car
and on-board infotainment content. Stingray Business, a division
of Stingray, provides commercial solutions in music, in-store
advertising solutions, digital signage, and AI-driven consumer
insights and feedback. Stingray Advertising is North America's
largest retail audio advertising network, delivering digital audio
messaging to more than 20,000 major retail locations. Stingray
has close to 1000 employees worldwide and reaches 540 million
consumers in 160 countries.
Annual Report 2023 | Stingray Group Inc. | 10
Products
Subscription services
(APPS & SVOD)
Mobile or OTT Apps
Expertly curated music channels, in all
genres, for all of life’s moments.
The world’s leading streaming service
for full-length concert films and music
documentaries.
A relaxing music and wellness
experience to increase focus, sleep
better, and reduce daily stress.
Over 100,000 karaoke songs in all the
most popular genres.
Over 100,000 karaoke songs with
optional special effects, mics, and
high-quality karaoke videos.
A Christian music and audiobook
experience to help remain inspired,
dedicated, and faithful to Him.
Yokee
Karaoke
Yokee
Piano
Piano
Academy
The ultimate karaoke destination to
perform and record songs, add voice
effects, and share with a network of
dedicated singers.
A gamefied piano app that offers
a diverse song-book and interactive
features, making piano playing
fun and accessible for all ages and
skill levels.
Learn how to master the piano from
scratch, or for those who have prior
knowledge and want to continue
learning, practice by playing along
to favorite songs.
Annual Report 2023 | Stingray Group Inc. | 12
Subscription Video On Demand
(SVOD)
Stingray’s SVOD offering is available through major
entertainment service providers such as Amazon, AT&T,
Comcast, and Samsung TV. The offering is growing
in reach through new carriers such as Cox, Claro
Música, Verizon, and YouTube TV.
The following Stingray services are available as SVOD:
Free, Ad-supported TV (FAST)
Stingray’s FAST channels allow customers to access
a wide variety of expertly curated content without
subscription fees. Our partners include Distro, Local
Now, Plex, Pluto TV, Samsung TV Plus, STIRR, Redbox
and Xumo.
The following Stingray services are available as FAST
channels:
→ Qello Concerts by Stingray
→ Stingray Classica
→ Stingray DJAZZ
→ Stingray Karaoke
→ Stingray Naturescape
→ Stingray Music
→ Qello Concerts by Stingray
→ Stingray Classica
→ Stingray DJAZZ
→ Stingray CMusic
→ Stingray Karaoke
→ Stingray Naturescape
Annual Report 2023 | Stingray Group Inc. | 13
Radio’s recovery continues
Canadian radio is on the mend, slowly but surely
bouncing back from the pandemic-era drop in
advertising revenue. Having said that, while the
industry has certainly improved compared to last
year, the operative word is “slowly.”
Stingray’s content team has worked hard to adjust
programming and deploy technology to attract and
captivate listeners in their new hybrid/remote work
environments, and to preserve radio as an essential
part of their daily lives. From engaging listeners on
smart speakers to increasing personality profiles
outside of morning drive, we continue to adapt to
shifting societal patterns. We are confident that as
more large companies call their employees back to
the office, we will see a corresponding increase in
commute-related tuning. Our brands are strong, and
our listeners are passionate, but routines and habits
have changed to such a degree that necessarily
impacts our business.
One thing that hasn’t changed is the roster of world-
class radio stations in the Stingray portfolio. In
2022, some of our most successful stations included
boom 97.3/Toronto, Hot 89.9/Ottawa, Q104/Halifax,
XL 103/Calgary, K97/Edmonton, and Z95.3/Vancouver.
Each one is a respected market leader in its respective
community. Our radio stations continue to serve
Canadian cities, large and small, with dedicated
broadcasters, entertainers, and journalists.
With our radio stations, podcasts, and digital audio
products combined, we continue to explore new
and efficient processes, including the creation of
regionally and nationally syndicated content, using
artificial intelligence to streamline content creation
and distribution, and investing in technology to
amplify our reach. These technological innovations
include using world-class streaming to reach listeners
on every device and rolling out HD radio to offer
listeners better sound quality and selection.
Beyond offering traditional radio commercials,
Stingray’s marketing and sales teams have embraced a
vast array of digital advertising products. From display
to social, from audio out-of-home to programmatic
outdoor and connected TVs, our advertising suite is
equipped to offer retail, streaming, and broadcast
media to reach customers wherever they shop,
listen, watch, travel, and play. The combination of
radio’s broad reach and digital’s ability to hyper-
target specific customer demographics creates a
very efficient and far-reaching model for advertisers
to grow their business.
Finally, there is optimism around a resurgence in
audio listening thanks to the growth of streaming
radio, podcasts, and audio books. Audio is having a
renaissance, and Stingray’s suite of radio stations and
digital products are well positioned to ride that wave.
Annual Report 2023 | Stingray Group Inc. | 14
Current
Company
Goals
1
2
Grow B2B digital revenues: Significantly increase B2B digital
revenues by developing and distributing new FAST (free ad-supported
TV) channels, SVOD services, and App offerings in new territories,
platforms, and verticals such as automotive.
Expand Audio Advertising Network: Drive growth through new
retail accounts, leveraging the latest ad technology with advanced tech
measurement and CPM, and strategic partnerships. Increase sales by
investing in additional sales resources and reaching a greater number
of clients and agencies.
Annual Report 2023 | Stingray Group Inc. | 16
3
4
5
Enhance global content offerings: Expand content offerings
and exclusivities with global best-in-class rights management.
Focus capital allocation on debt reduction and a disciplined
M&A strategy.
Foster an innovative company culture: Integrate AI tools and
features into all aspects of the business to encourage a culture of
innovation.
Annual Report 2023 | Stingray Group Inc. | 17
Proven
Acquisition
Strategy
2007
2009
2010
→ Slep-Tone Entertainment Corp/
→ Canadian Broadcast Corp.
SoundChoice (Karaoke Channel)
(Galaxie)
→ Marketing Senscity Inc.
→ Concert TV Inc.
→ MaxTrax Music Ltd.
→ Chum Satellites Services (CTV)
2011
→ Music Choice International Ltd.
2012
→ Musicoola Ltd.
→ Zoe Interactive Ltd.
2013
→ Executive Communication
→ Emedia Networks Inc.
→ Stage One Innovations Ltd.
→
Intertain Media Inc
2014
→ DMX LATAM (Mood Media)
→ Archibald Media Group
→ DMX Canada (Mood Media)
→ Telefonica – On the Spot
2015
2016
→ Les réseaux Urbains Viva Inc.
→ Brava Group
(HDTV, NL and Djazz TV)
→ Digital Music Distribution
→
iConcerts Group
→ Nümedia
→ Festival 4K B.V.
→ Bell Media’s specialty
music video channels
→ EuroArts Classical catalogue
Annual Report 2023 | Stingray Group Inc. | 18
$849M
spent on acquisitions
since inception
Stingray became the undisputed world-leading provider
of music programming demonstrating our ability to act
as an industry consolidator.
2017
2018
→ Classica
→ Nature Vision TV
→ Yokee Music Ltd.
→ C Music Entertainment Ltd.
→ SBA Music PTY Ltd.
→ Satellite Music Australia PTY Ltd.
→ Qello Concerts LLC
→ Newfoundland Capital
Corporation
→ Novramedia
→ DJ Matic
→ New Glasgow
2019
→ Drumheller Radio
2020
→ Chatter Research Inc.
→ Minority investment in
The Podcast Exchange (TPX)
2021
→ Marketing Sensorial México
2022
→ Calm Radio Corp
→ Minority investment in
The Singing Machine
InStore Audio Network
→
2023
→ Ultimate Trivia Network
Annual Report 2023 | Stingray Group Inc. | 19
Competitive
Strengths
We believe that the following competitive strengths will contribute to our ongoing commercial success and
future performance:
Unique and diversified world leading
music and video service provider
With more than 400 million subscribers in 160 countries,
our total reach is one of the largest relative to our
peers. Our products and services are distributed
through numerous platforms including digital TV,
satellite TV, IPTV, the Internet, mobile devices, Wi-Fi
systems, game consoles, and connected cars. With
101 radio licenses and more than 160 million App
downloads, Stingray reaches millions of radio listeners
and App users every month.
Strong and predictable cash flow
from long-term contracts and client
relationships
Apart from radio and FAST offerings, our business
model is based on subscription revenues and long-
term agreements with pay-TV providers and OTT
platforms, which gives us significant predictability
of future cash flow, reduces cyclicality of earnings,
and increases customer retention.
Proprietary innovative technologies
We are a leader and innovator in the digital music
space, and as such have developed a unique set
of proprietary technologies that provide us with an
important competitive advantage. We have extensive
experience in developing technologies to distribute
digital music on multiple platforms such as TV, mobile
devices, and the Web. For instance, we introduced
a second generation of UBIQUICAST allowing multi-
product distribution and a third generation of our
commercial platform – the SB3 allowing simultaneous
distribution of digital display and HD music. We are
also a leader in customer insights with Chatter, a
proprietary AI-powered platform that provides
retailers with actionable feedback. Its unique
combination of SMS-based chats and machine
learning technology captures real-time shopper
insights that allow businesses to improve customer
satisfaction and drive sales.
Business agility
We have nimbly adjusted to (and take advantage of)
emerging growth opportunities, including steering
our product development strategies by leveraging
AI-driven data analysis and decision making, and
scaling our services through strategic partnerships
in various rapidly evolving markets.
Annual Report 2023 | Stingray Group Inc. | 20
Track record of successful
acquisitions and integrations
Since Stingray’s inception in 2007, we have completed
46 acquisitions representing outlays of approximately
$849 million, which brought new clients, new products
and new geographical markets to our business.
Stingray’s proven track record of successfully
consummating and integrating these acquisitions
is a result of our experienced management team’s
rigorous and disciplined acquisition strategy. The
versatility, portability, and flexibility of Stingray’s
products and technologies permit us to efficiently
integrate and support the complementary products
and technologies of the businesses we acquire.
Leading content curation expertise
Our business strategy is based on a lean-back,
rather than a lean-forward, music consump tion
model. Stingray provides some of the world’s most
comprehensive music libraries and channels, all
programmed by expert curators around the world.
Our music products and services are adapted to
local tastes and trends to create the ultimate user
experience.
Annual Report 2023 | Stingray Group Inc. | 21
Key
Business
Risks
The key risks and uncertainties of our business drive our operating strategies. Additional risks and uncer-
tainties not presently known to us, or that we currently consider immaterial, may also affect us. If any of the
events identified in these risks and uncertainties were to occur, Stingray’s business, financial condition, and
results of operations could be materially impacted.
For further discussion of the significant risks we face, refer to the Annual Information Form for the year
ended March 31, 2023 available on SEDAR at sedar.com.
Our key risks, in terms of severity of consequence and likelihood, are displayed as follows:
Public performance and mechanical
rights and royalties
We pay public performance and mechanical royalties
to performers, songwriters, and publishers through
contracts negotiated with labels and music rights
collection societies in various parts of the world. If
public performance or mechanical royalty rates for
digital music are increased, our results of operations
and financial performance and condition may be
adversely affected. We mitigate this risk by operating,
whenever possible, under statutory licensing regimes
and structures applicable to non-interactive music
services. The royalty rates to be paid pursuant to
statutory licenses can be established by either nego-
tiation or through a rate proceeding conducted by
the Copyright Board; such royalty rates are generally
stable and are not likely to fluctuate from year to year.
Integrating business acquisitions
The Corporation has made or entered into, and will
continue to pursue, various acquisitions, business
combinations, and joint ventures intended to
complement or expand our business. The Corporation
may encounter difficulties in integrating acquired
assets with our operations. Furthermore, the
Corporation may not realize the benefits, economies
of scale, and synergies we anticipated when we
entered into these transactions. To mitigate this risk,
the Corporation has committed to developing and
improving our operational, financial, and management
controls, enhancing our reporting systems and
procedures, and recruiting, training, and retaining
highly skilled personnel, all of which will enable the
Corporation to properly leverage our services into
new markets, platforms and technologies.
Long-term plan to expand into
international markets
A key element of our growth strategy is to continue
to expand our operations into international markets.
For fiscal 2023, approximately 42% of our revenue is
derived from customers outside of Canada. Operating
in international markets requires significant resources
and management attention and will subject us to
regulatory, economic, and political risks that are
different from those in Canada. To mitigate this
risk, the Corporation has committed to developing
and improving our operational, financial, and
management controls, enhancing our reporting
systems and procedures, and recruiting, training,
and retaining highly skilled personnel, all of which
will enable the Corporation to continue to expand
into international markets.
Annual Report 2023 | Stingray Group Inc. | 22
Reliance on Pay-TV providers
The majority of the Stingray Music pay-TV subscriber
base is reached through a small number of significant
pay-TV providers who are all under long-term
contracts. Packaging decisions made by pay-TV
providers in respect of service offerings can impact
the subscriber base. Moreover, the contractual
obligations of pay-TV providers in Canada to distribute
Stingray Music are subject to changes in CRTC rules,
including the CRTC’s policy framework set forth in
Broadcasting Regulatory Policy CRTC 2015- 96. We
mitigate this risk by understanding the business
needs of pay-TV providers and offering compelling
services, distributed across multiple platforms and
proprietary technologies, with a demonstrable value
proposition. Based on our strong relationships and
our interpretation of the long-term contracts with
payTV providers, Stingray expects that all Canadian
pay-TV providers will continue to carry Stingray’s
pay-audio service and Stingray’s other offerings on
their platforms.
Rapid growth in an evolving market
The audio and video entertainment industry is rapidly
evolving. The market for online digital music and videos
has undergone rapid and dramatic changes in our
relatively short history and is subject to significant
challenges. In addition, our growth in certain
markets could be impeded by existing contractual
undertakings with competitors which forbid us from
soliciting customers in such markets. To mitigate this
risk, our skilled and experienced sales personnel
have placed a greater emphasis on cross-selling our
growing suite of products and our capable engineers
continue to innovate and develop new products and
proprietary technologies to distribute digital music,
which in turn allows us to attract and retain customers
and expand our service offering on multiple digital
platforms beyond the TV. To manage the growth of
our operations and personnel, we continue to improve
our operational, financial and management controls
and our reporting systems and procedures.
Competition from other content
providers
The market for acquiring exclusive digital rights from
content owners is competitive. Many of the more
desirable music recordings are already subject to
digital distribution agreements or have been directly
placed with digital entertainment services. We face
increasing competition for listeners and/or viewers
from a growing variety of businesses that deliver
audio and/or video media content through mobile
phones and other wireless devices. The growth of
social media could facilitate other forms of new entry
that will compete with the Corporation. To mitigate this
risk, the Corporation continues to rely upon human
programming and content curation by award-winning
music experts from around the world, each of whom
adapt to the tastes and trends of listeners in order
to create the ultimate user experience. In addition,
the Corporation remains determined to create and
acquire original long-form content in order to grow
its proprietary catalog.
Pandemic
The COVID-19 pandemic has introduced significant
uncertainties into our business landscape. Any new
pandemic or event that requires retailers to shutter
or affects supply chains can have an important
detrimental impact on our radio advertising revenues.
Annual Report 2023 | Stingray Group Inc. | 23
Executive
Officers
Eric Boyko
President, CEO, Co-founder
and Director
Jean-Pierre Trahan
Chief Financial Officer
Lloyd Feldman
Senior Vice-President,
General Counsel and
Corporate Secretary
Mario Dubois
Senior Vice-President and
Chief Technology Officer
Mathieu Péloquin
Senior Vice-President,
Marketing and
Communications
David Purdy
Chief Revenue Officer
Ian Lurie
President, Radio
Valérie Héroux
Vice-President,
Content Acquisition
and Programming
Ratha Khuong
General Manager,
Stingray Business
Annual Report 2023 | Stingray Group Inc. | 24
Non-Executive
Directors
Claudine Blondin
Director, Chairwoman of
the Corporate Governance
Committee and Member
of the Human Resources
Committee
Karinne Bouchard
Director and Chairwoman
of the Audit Committee
Mélanie Dunn
Director and Member of
the Corporate Governance
Committee and Member
of the Human Resources
Committee
Frédéric Lavoie
Director and Member
of the Audit Committee
Mark Pathy
Chairman of the Board
of Directors
Gary S. Rich
Director and Chairman
of the Human Resources
Committee
François-Charles
Sirois
Director and Member
of the Human Resources
Committee
Robert G. Steele
Director
Pascal Tremblay
Director and Member of
the Corporate Governance
Committee and Member
of the Audit Committee
Annual Report 2023 | Stingray Group Inc. | 25
BASIS OF PREPARATION AND FORWARD-LOOKING STATEMENTS
The following is the annual financial report and Management’s Discussion and Analysis (“MD&A”) of the results of operations and financial position of
Stingray Group Inc., (“Stingray” or “the Corporation”), and should be read in conjunction with the Corporation’s audited consolidated financial
statements and accompanying notes for the years ended March 31, 2023 and 2022. This MD&A reflects information available to the Corporation as at
June 6, 2023. Additional information relating to the Corporation is also available on SEDAR at www.sedar.com.
This MD&A contains forward-looking information within the meaning of applicable Canadian securities laws. This forward-looking information includes,
but is not limited to, statements with respect to management’s expectations regarding the future growth, results of operations, performance and business
prospects of the Corporation. This forward-looking information relates to, among other things, our objectives and the strategies to achieve these
objectives, as well as information with respect to our beliefs, plans, expectations, anticipations, estimations and intentions, and may also include other
statements that are predictive in nature, or that depend upon or refer to future events or conditions. Statements with the words “could”, “expect”,
“may”, “will”, “anticipate”, “assume”, “intend”, “plan”, “believes”, “estimates”, “guidance”, “foresee”, “continue” and similar expressions are intended
to identify statements containing forward-looking information, although not all forward-looking statements include such words. In addition, any
statements that refer to expectations, projections or other characterizations of future events or circumstances contain forward-looking information.
Statements containing forward-looking information are not historical facts but instead represent management’s expectations, estimates and projections
regarding future events.
Although management believes the expectations reflected in such forward-looking statements are reasonable, forward-looking statements are based
on the opinions, assumptions and estimates of management at the date the statements are made and are subject to a variety of risks and uncertainties
and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. These factors
include, but are not limited to the following risk factors : increases in royalties and tariffs or restricted access to music rights; our dependence on Pay-
TV providers; the rapidly evolving audio and video entertainment industry; competition from other content providers and other media companies; the
expansion of our operations into international markets; our rapid growth and our growth strategy; our acquisitions, business combinations and joint
ventures; our reliance on third party hardware, software and related services; our dependence on key personnel; exchange rate fluctuations; economic
and political instability in emerging countries; royalty calculation methods; rapid technological and industry changes; development of new or alternative
media technologies ; unavailability of additional funding; failure to generate cash revenues; reliance on our credit facilities; costly and protracted litigation
in defence of copyrighted content; our inability to protect our proprietary technology; our inability to maintain our corporate culture; unfavourable
economic conditions; our exposure to foreign privacy and data security laws; unauthorized and pirated music and video content; natural catastrophic
events and interruption by man-made problems; pandemics, epidemics and other health risks; additional income tax liabilities; maintaining our
reputation; litigation and other claims; credit risk; liquidity risk; failure to comply with the Canadian Radio-television and Telecommunications Commission
(“CRTC”) requirements; failure to maintain or renew our CRTC licences; the increase in broadcasting licence fees payable by us; unfavourable changes
in government regulation affecting our industry.
In addition, if any of the assumptions or estimates made by management prove to be incorrect, actual results and developments are likely to differ, and
may differ materially, from those expressed or implied by the forward-looking statements contained in this MD&A. Such assumptions include, but are
not limited to, the following: our ability to generate sufficient revenue while controlling our costs and expenses; our ability to manage our growth
effectively; the absence of material adverse changes in our industry or the global economy; trends in our industry and markets; the absence of any
changes in law, administrative policy or regulatory requirements applicable to our business, including any change to our licences with the CRTC; minimal
changes to the distribution of the pay audio services by Pay-TV providers in light of recent CRTC policy decisions; our ability to manage risks related to
international expansion; our ability to maintain good business relationships with our clients, agents and partners; our ability to expand our sales and
distribution infrastructure and our marketing; our ability to develop products and technologies that keep pace with the continuing changes in technology,
evolving industry standards, new product introductions by competitors and changing client preferences and requirements; our ability to protect our
technology and intellectual property rights; our ability to manage and integrate acquisitions; our ability to retain key personnel; and our ability to raise
sufficient debt or equity financing to support our business growth. Accordingly, prospective purchasers are cautioned not to place undue reliance on
such statements. All of the forward-looking information in this MD&A is qualified by these cautionary statements. Statements containing forward-looking
information contained herein are made only as of the date of this MD&A. The Corporation expressly disclaims any obligation to update or alter statements
containing any forward-looking information, or the factors or assumption underlying them, whether as a result of new information, future events or
otherwise, except as required by law.
Annual Report 2023 | Stingray Group Inc. | 26
OVERVIEW
Stingray (TSX: RAY.A; RAY.B), a global music, media, and technology company, is an industry leader in TV broadcasting,
streaming, radio, business services, and advertising. Stingray provides an array of music, digital, and advertising services to
enterprise brands worldwide, including audio and video channels, over 100 radio stations, subscription video-on-demand
content, FAST channels, karaoke products and music apps, and in-car and on-board infotainment content. Stingray Business,
a division of Stingray, provides commercial solutions in music, in-store advertising solutions, digital signage, and AI-driven
consumer insights and feedback. Stingray Advertising is North America's largest retail audio advertising network, delivering
digital audio messaging to more than 20,000 major retail locations. Stingray has close to 1000 employees worldwide and
reaches 540 million consumers in 160 countries. For more information, visit www.stingray.com.
KEY PERFORMANCE INDICATORS
For the three-month period ended March 31, 2023 (“Q4 2023”):
$4.4 M
$27.6 M
$78.9 M
▲ 8.7% from Q4 2022
Revenues
▼ 0.4% from Q4 2022
Net income
Or $0.06 per share
▲ 24.5% from Q4 2022
Cash flow from
operating activities
Or $0.40 per share(2)
$14.9 M
▲ 26.0% from Q4 2022
Adjusted free cash
flow(1)
Or $0.21 per share
$26.6 M
$14.7 M
▲ 26.4% from Q4 2022
Adjusted EBITDA(1)
▲ 24.5% from Fiscal 2022
Adjusted Net income(1)
Or $0.21 per share
For the year ended March 31, 2023 (“Fiscal 2023”):
$323.9 M
$30.1 M
$86.9 M
▲ 14.6% from Fiscal 2022
Revenues
▼ 9.5% from Fiscal 2022
Net income
Or $0.43 per share
$114.1 M
$55.2 M
▲ 15.0% from Fiscal 2022
Adjusted EBITDA(1)
▼ 2.1% from Fiscal 2022
Adjusted Net income(1)
Or $0.79 per share
▲ 3.9% from Fiscal 2022
Cash flow from
operating activities
Or $1.25 per share(2)
$63.7 M
▲ 11.8% from Fiscal 2022
Adjusted free cash
flow(1)
Or $0.90 per share
Note:
(1) This is a non-IFRS measure and is not a standardized financial measure. Our 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. Refer to “Supplemental Information on Non-IFRS Measures” on page 31 for more information on each non-IFRS measure and for
reconciliations to the most directly comparable IFRS financial measure, refer to “Non-IFRS Measures Reconciliations” on page 33 and “Reconciliation
of Quarterly Non-IFRS Measures” on page 43.
(2) This is a non-IFRS measure and is not a standardized financial measure. This non-IFRS measure is calculated by dividing Cash flow from operating
activities by the weighted average number of shares (basic).
Annual Report 2023 | Stingray Group Inc. | 27
FINANCIAL AND BUSINESS HIGHLIGHTS
Highlights of the fourth quarter ended March 31, 2023
Compared to the quarter ended March 31, 2022 (“Q4 2022”):
Revenues increased 8.7% to $78.9 million from $72.6 million;
Adjusted EBITDA(1) increased 26.4% to $26.6 million from $21.0 million. Adjusted EBITDA(1) by segment was $20.4 million
or 40.8% of revenues for Broadcasting and Commercial Music, $7.7 million or 26.6% of revenues for Radio and
$(1.5) million for Corporate;
Net income was $4.4 million ($0.06 per share) compared to $4.5 million ($0.06 per share);
Adjusted Net income(1) increased to $14.7 million ($0.21 per share) from $11.8 million ($0.17 per share);
Cash flow from operating activities increased 24.5% to $27.6 million ($0.40 per share) from $22.1 million ($0.31 per
share);
Adjusted free cash flow(1) increased 26.0% to $14.9 million ($0.21 per share) from $11.8 million ($0.17 per share);
Net debt to Pro Forma Adjusted EBITDA(1) ratio of 3.19x, compared to 3.16x; and
53,300 shares were repurchased and cancelled for a total of $0.3 million compared to 80,200 shares for a total of
$0.6 million.
Highlights of the year ended March 31, 2023
Compared to the year ended March 31, 2022 (“Fiscal 2022”):
Revenues increased 14.6% to $323.9 million from $282.6 million;
Adjusted EBITDA(1) increased 15.0% to $114.1 million from $99.3 million. Adjusted EBITDA(1) by segment was
$76.7 million or 39.3% of revenues for Broadcasting and Commercial Music, $42.9 million or 33.3% of revenues for Radio
and $(5.5) million for Corporate;
Net income was $30.1 million ($0.43 per share) compared with $33.3 million ($0.47 per share);
Adjusted Net income(1) of $55.2 million ($0.79 per share) compared with $56.4 million ($0.79 per share);
Cash flow from operating activities increased 3.9% to $86.9 million ($1.25 per share) from $83.7 million ($1.17 per share);
Adjusted free cash flow(1) increased 11.8% to $63.7 million ($0.90 per share) from $56.9 million ($0.80 per share);
Net debt to Pro Forma Adjusted EBITDA(1) ratio of 3.19x, compared to 3.16x; and
786,100 shares repurchased and cancelled for a total of $4.4 million compared to 2,106,000 shares for a total of
$15.0 million.
Note:
(1) This is a non-IFRS measure and is not a standardized financial measure. Our 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. Refer to “Supplemental Information on Non-IFRS Measures” on page 31 for more information on each non-IFRS measure and for
reconciliations to the most directly comparable IFRS financial measure, refer to “Non-IFRS Measures Reconciliations” on page 33 and “Reconciliation
of Quarterly Non-IFRS Measures” on page 43.
Annual Report 2023 | Stingray Group Inc. | 28
Additional business highlights for the fourth quarter and subsequent events:
On March 31, 2023, the Corporation acquired the assets and business of the Ultimate Trivia Network, a move that paves
the way for the launch of an exciting new product, Ultimate Trivia by Stingray. Initially launching as an ad-supported
linear channel, Ultimate Trivia by Stingray promises to deliver a captivating and interactive experience for kids and adults
of all ages.
On March 22, 2023, 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, 2023, to shareholders on
record as of May 31, 2023.
On March 15, 2023, the Corporation announced that Qello Concerts, the premium streaming service that offers full-
length concerts and award-winning music documentaries across all genres and eras, is now available on Verizon’s +play-
the cutting-edge platform built by Verizon for customers to shop for, manage and save on their favorite subscriptions, all
in one place.
On March 1, 2023, the Corporation announced a global deal with Harman, the premier connected technologies company
for automotive, consumer and enterprise markets, and CARIAD, Volkswagen Group’s software company, to bring its
popular Stingray Karaoke product to selected Audi models around the globe.
On February 7, 2023, 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, 2023, to shareholders on record as of
February 28, 2023.
On January 23, 2023, the Corporation announced the launch of CalmLIFE, a brand-new digital wellness resource to help
viewers live better every day. Comcast customers with Xfinity X1, Xfinity Flex or Xumo TV, and Cox customers with
Contour devices now have access to a plethora of full-length 4K wellness assets, including meditation, sleep, and nature
videos.
On January 3, 2023, the Corporation announced its latest partnership with The Singing Machine Company, Inc. (“Singing
Machine”) (NASDAQ: MICS) –, the worldwide leader in consumer karaoke products, to launch the world’s first fully-
integrated hardware and software in-car karaoke solution for the global automotive market.
Annual Report 2023 | Stingray Group Inc. | 29
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(in thousands of Canadian dollars, except
per share amounts)
Revenues
Operating expenses
Depreciation, amortization and
write-off
Net finance expense (income)(1)
Change in fair value of investments
Acquisition, legal, restructuring and
other expenses
Income before income taxes
Income taxes
Net income
3 months
March 31, 2023
Q4 2023
March 31, 2022
Q4 2022
March 31, 2023
Fiscal 2023
12 months
March 31, 2022
Fiscal 2022
$
% of
revenues
$
% of
revenues
$
% of
revenues
$
% of
revenues
March 31, 2021
Fiscal 2021
Recast (3)
% of
revenues
$
78,931
54, 583
100.0 %
69.2 %
72,644
53,593
100.0 %
73.8 %
323,944 100.0 % 282,626 100.0 % 247,857 100.0 %
212,272 65.4 % 189,954 67.1 % 140,876 56.8 %
8,178
10.4 %
3,749 4.7 %
0.0 %
11
9,239
(769)
12
12.7 %
(1.1) %
0.0 %
32,980 10.2 %
26,835
8.3 %
(289)
(0.1) %
35,544 12.6 % 38,692 15.6 %
(0.5) %
2.2 %
(1,199)
3,787
0.0 %
1.5 %
6,119
2
7,210
5,200
753
4,447
9.1 %
6.6 %
1.0 %
5.6 %
5,912
4,657
191
4,466
8.1 %
6.5 %
0.3 %
6.2 %
12,487
3.9 %
39,659 12.3 %
2.9 %
9,540
30,119
9.4 %
8,707
4,637
3.1 %
1.9 %
42,300 15.0 % 61,064 24.7 %
3.2 % 15,960
6.5 %
33,287 11.8 % 45,104 18.2 %
9,013
Adjusted EBITDA(2)
Adjusted Net income(2)
Cash flow from operating activities
Adjusted free cash flow(2)
Net debt(2)
Net debt to Pro Forma Adjusted
EBITDA(2)
26,573
14,668
27,552
14,909
371,080
3.19x
Net income per share basic
Net income per share diluted
Adjusted Net income per share basic(2)
Adjusted Net income per share diluted(2)
Cash flow from operating activities per
share basic
Cash flow from operating activities per
share diluted
Adjusted free cash flow per share
basic(2)
Adjusted free cash flow per share
diluted(2)
0.06
0.06
0.21
0.21
0.40
0.40
0.22
0.21
–
–
–
–
–
–
–
–
–
–
33.7 %
18.6 %
34.9 %
18.9 %
21,023
11,780
22,127
11,833
369,082
28.9 %
16.2 %
30.5 %
16.3 %
114,140 35.2 %
55,202 17.0 %
86,949 26.8 %
63,662 19.7 %
99,269 35.1 % 114,268 46.1 %
56,389 20.0 % 62,855 25.4 %
83,663 29.6 % 104,246 42.1 %
56,933 20.1 % 74,359 30.0 %
–
–
–
–
–
–
–
–
–
–
371,080
–
369,082
3.19x
0.43
0.43
0.79
0.79
1.25
1.25
0.91
0.90
–
–
–
–
–
–
–
–
–
3.16x
0.47
0.47
0.79
0.79
1.18
1.17
0.80
0.80
–
–
–
–
–
–
–
–
–
–
326,405
2.81x
0.62
0.61
0.86
0.86
1.42
1.42
1.01
1.01
–
–
–
–
–
–
–
–
–
–
3.16x
0.06
0.06
0.17
0.17
0.32
0.31
0.17
0.17
Revenues by segment
Broadcasting and Commercial Music
Radio
Revenues
Revenues by geography
Canada
United States
Other Countries
Revenues
50,045
28,886
78,931
63.4 %
36.6 %
100.0 %
45,584
27,060
72,644
62.7 %
37.3 %
100.0 %
195,234 60.3 % 159,082 56.3 % 150,047 60.5 %
128,710 39.7 % 123,544 43.7 % 97,810 39.5 %
323,944 100.0 % 282,626 100.0 % 247,857 100.0 %
55.4 %
43,667
21,968
13,296
16.8 %
78,931 100.0 %
27.8 %
40,456
19,145
13,043
72,644
55.6 %
26.4 %
18.0 %
100.0 %
187,032 57.8 % 177,739 62.9 % 150,729 60.8 %
52,403 18.5 % 40,417 16.3 %
52,484 18.6 % 56,711 22.9 %
323,944 100.0 % 282,626 100.0 % 247,857 100.0 %
85,992 26.5 %
50,920 15.7 %
Notes:
(1)
Interest paid during Q4 2023 was $6.8 million (Q4 2022; $3.4 million) and $23.9 million during Fiscal 2023 (Fiscal 2022; $14.4 million and Fiscal 2021;
$18.1 million).
(2) This is a non-IFRS measure and is not a standardized financial measure. Our 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. Refer to “Supplemental Information on Non-IFRS Measures” on page 31 for more information on each non-IFRS measure and for
reconciliations to the most directly comparable IFRS financial measure, refer to “Non-IFRS Measures Reconciliations” on page 33 and “Reconciliation
of Quarterly Non-IFRS Measures” on page 43.
(3) The 2021 comparative figures have been recast to adjust certain contracts that were recognized on a gross basis that should have been recognized on
net basis. Consolidated revenues and operating expenses have been reduced from $249.5 million to $247.9 million and $142.5 million to $140.9 million,
respectively.
Annual Report 2023 | Stingray Group Inc. | 30
SUPPLEMENTAL INFORMATION ON NON-IFRS MEASURES
The Corporation uses non-IFRS measures and ratios to provide investors with supplemental metrics to assess and measure
its operating performance and financial position, as applicable, from one period to the next. The Corporation believes that
those measures are important supplemental metrics because they eliminate items that have less bearing on its core business
performance and could potentially distort the analysis of trends in its performance and financial position. The Corporation also
uses non-IFRS measures to facilitate financial performance comparisons from period to period, to prepare annual budgets and
forecasts and to determine components of management compensation. The Corporation believes these non-GAAP financial
measures, in addition to the financial measures prepared in accordance with IFRS, enable investors to evaluate the
Corporation’s results, underlying performance and future prospects in a manner similar to management.
Each of the below 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. Our 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
The Corporation believes that Adjusted EBITDA provides investors with useful information because it is a common industry
measure and it is also a key metric of the Corporation's financial performance without the variation caused by the impacts of
the elements itemized below. Further, it provides an indication of the Corporation's ability to seize growth opportunities in a
cost-effective manner as well as finance its ongoing operations and service its long-term debt. Adjusted EBITDA is defined as
earnings before Net finance expense (income), income taxes, depreciation, amortization, share-based compensation,
performance and deferred share unit expense, change in fair value of investments, and acquisition, legal, restructuring, other
expenses, including one time settlement and shared results in joint venture. The Corporation believes that Adjusted EBITDA
is an important measure when analyzing its profitability without being influenced by financing decisions, non-cash items and
income tax strategies. The Corporation also presents such non-IFRS measure because it believes such non-IFRS measure is
frequently used by securities analysts, investors and other interested parties as measures of financial performance.
Adjusted EBITDA margin
Adjusted EBITDA margin ratio is a non-IFRS ratio used by management to analyze the profitability of the Corporation and
facilitate period-to-period comparisons. This ratio is calculated by dividing the amount of Adjusted EBITDA for a given period
by the amount of revenue for the same period. The Corporation believes that Adjusted EBITDA margin is an important measure
when analyzing its profitability without being influenced by financing decisions, non-cash items and income tax strategies. The
Corporation also presents such non-IFRS ratio because it believes such non-IFRS ratio is frequently used by securities analysts,
investors and other interested parties as measures of financial performance.
Adjusted free cash flow
Adjusted free cash flow is a non-IFRS measure used by management to assess the amount of cash generated after accounting
for capital expenditures and cash outflows that support our operations. It is a useful measure because it demonstrates cash
available to make business acquisitions, pay dividends and reduce debt. Furthermore, this non-IFRS measure is a useful
indicator of the Corporation’s financial strength and liquidity. Adjusted free cash flow is calculated by taking the net cash
generated from our operating activities, subtracting capital expenditures, interest paid, repayment of lease liabilities, net
change in non-cash operating working capital items and unrealized losses or gains on foreign exchange, and excluding
acquisition, legal, restructuring and other expenses. Refer to section “Non-IFRS measures reconciliations” of this MD&A for a
reconciliation of this measure to the most directly comparable measure under IFRS.
Adjusted free cash flow per share
Adjusted free cash flow per share is calculated by dividing the amount of Adjusted free cash flow for a given period by the
weighted average number of diluted shares. This non-IFRS measure is useful because it provides an indication of the
Corporation’s financial strength and liquidity on a per share basis and facilitates the comparison across reporting periods.
Adjusted Net income
Adjusted Net income is a non-IFRS measure used by management to assess performance of the Corporation as it provides
meaningful performance results and facilitates period-to-period comparisons. The Corporation believes Adjusted Net income
is useful to investors because it helps identify underlying trends in our business that could otherwise be masked by certain
write-offs, charges, income or recoveries that can vary from period to period. The Corporation believes that Adjusted Net
income is an important measure as it shows stable results which allows users of the financial statements to better assess the
trend in the profitability of the business. It is calculated by excluding from the Net income unrealized gains or losses on
derivative financial instruments, amortization from intangible assets, gains or losses from the change in fair value of
investments, share-based compensation, performance and deferred share unit expense, acquisition, legal, restructuring and
Annual Report 2023 | Stingray Group Inc. | 31
other expenses, including one time settlement and shared results in joint venture, as well as the tax impact of these
adjustments. Refer to section “Non-IFRS measures reconciliations” of this MD&A for a reconciliation of this measure to the
most directly comparable measure under IFRS.
Adjusted Net income per share
Adjusted Net income per share is a non-IFRS ratio used by management to assess financial performance results of the
Corporation on a per share basis and because the Corporation believes it facilitates period-to-period comparisons. Adjusted
Net income per share is calculated by dividing the amount of Adjusted Net Income for a given period by the weighted average
number of diluted shares.
LTM Adjusted EBITDA
Last twelve months (LTM) Adjusted EBITDA is a non-IFRS measure representing the Adjusted EBITDA of a given quarterly
period, plus the Adjusted EBITDA of the three quarters immediately preceding such referenced period. Management believes
that LTM Adjusted EBITDA is a useful measure to evaluate the Corporation’s financial performance during the immediately
preceding twelve-month time period.
Pro Forma Adjusted EBITDA
Pro Forma Adjusted EBITDA is a non-IFRS measure representing LTM Adjusted EBITDA adjusted to include Adjusted EBITDA
from acquisitions for the months prior to such acquisitions, as well as estimated revenue and cost saving synergies from such
acquisitions and the value of credit notes granted to certain customers as a result of the COVID-19 pandemic. Furthermore,
Pro Forma Adjusted EBITDA was adjusted in Fiscal 2023 to include the impact on a 12-month basis of the significant cost
efficiency measures, following Management’s initiative to eliminate the projects that were not aligned with the latest strategic
plan of the Corporation. The amount calculated represents the net impact of the cost efficiencies, mostly salaries, and the cost
of the new hires that were completed in the fastest growing divisions. Those efficiencies were progressively deployed in Q2
and Q3 2023. For Fiscal 2022, the synergies included derive from the acquisitions of InStore Audio Network and Calm Radio.
For Fiscal 2022, Pro Forma Adjusted EBITDA includes an adjustment for credits that were given to various customers following
the mandated store closures required by governments due to the pandemic. Management believes that Pro Forma Adjusted
EBITDA provides investors with useful financial metrics to assess and evaluate the Corporation’s financial performance from
period-to-period by adjusting for the impact of acquisitions and cost saving initiatives assuming they occurred at the beginning
of the fiscal year, as well as certain events that are otherwise non-recurring. The Corporation also presents such non-IFRS
measure because it believes such non-IFRS measure is frequently used by securities analysts, investors and other interested
parties as a measure of financial performance.
Adjustments to arrive to Pro Forma Adjusted EBITDA are based on estimates and assumptions made by management that are
inherently uncertain, although considered reasonable by management, and subject to significant business, economic and
competitive uncertainties and contingencies, all of which are difficult to predict and many of which are beyond our control.
Adjusted EBITDA from acquisitions for the months prior to such acquisitions are based on the internal books and records
available to management and has been determined using the definition used by the Corporation. The amounts exclude certain
non-recurring charges that have been or will be incurred in connection with such acquisitions, including professional fees to
complete the acquisitions. Synergies, the adjustment for credits granted and for cost efficiency measures are based on certain
estimates and assumptions and should not be regarded as a representation by the Corporation or any other person that the
Corporation will achieve such results. Pro Forma Adjusted EBITDA is presented for informational purposes only and does not
purport to represent the Corporation’s results had the acquisitions been made by the Corporation at the beginning of the
period presented nor is such measure meant to project the results for any future date or period. As a result, readers should
exercise caution in interpreting this financial measure and should not place undue reliance thereon.
Net debt
Net debt is a non-IFRS measure calculated as the Corporation’s credit facilities, including the current portion of credit facilities,
and subordinated debt less the Corporation’s cash and cash equivalents. It is used by management to monitor the amount of
debt at a particular date after taking into account cash and cash equivalents and as an indicator of the Corporation’s overall
financial position.
Net debt to Pro Forma Adjusted EBITDA ratio
Net debt to Pro Forma Adjusted EBITDA is a non-IFRS ratio calculated as Net debt divided by Pro Forma Adjusted EBITDA.
The Corporation believes that Net debt to Pro Forma Adjusted EBITDA is an important measure when analyzing the
Corporation’s debt repayment capacity on an annualized basis, taking into consideration the annualized Adjusted EBITDA,
synergies of acquisitions and permanent cost-saving initiatives made during the last twelve months.
Annual Report 2023 | Stingray Group Inc. | 32
NON-IFRS MEASURES RECONCILIATIONS
Adjusted EBITDA, Pro Forma Adjusted EBITDA, LTM Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net income,
Adjusted Net income per share, Adjusted free cash flow, Adjusted free cash flow per share, Net debt and Net debt to Pro
Forma Adjusted EBITDA ratio are non-IFRS measures that the Corporation uses to assess its operating performance. Refer to
“Supplemental information on Non-IFRS Measures” on page 31.
The following tables show the reconciliation of Net income to Adjusted EBITDA, to Adjusted Net income, LTM Adjusted
EBITDA and to Pro Forma Adjusted EBITDA:
3 months
12 months
(in thousands of Canadian dollars)
Net income
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
Acquisition, legal, restructuring and other expenses
Adjusted EBITDA
Adjusted EBITDA margin
Net income
Adjusted for:
Change in fair value of derivative financial instruments
Amortization of intangible assets
Change in fair value of investments
Share-based compensation
Performance and deferred share unit expense
Acquisition, legal, restructuring and other expenses
Income taxes related to change in fair value of investments,
share-based compensation, performance and deferred
share unit expense, amortization of intangible assets,
change in fair value of derivative financial instruments and
acquisition, legal, restructuring and other expenses
Adjusted Net income
Average number of shares outstanding (diluted)
Adjusted Net income per share (diluted)
March 31,
2023
Q4 2023
4,447
3,749
11
753
2,406
1,225
4,547
157
2,068
7,210
26,573
33.7%
March 31,
2022
Q4 2022
4,466
(769)
12
191
3,862
1,201
4,176
222
1,750
5,912
21,023
28.9%
March 31,
2023
Fiscal 2023
30,119
26,835
(289)
9,540
9,737
4,506
18,737
611
1,857
12,487
114,140
35.2%
March 31,
2022
Fiscal 2022
33,287
6,119
2
9,013
11,069
5,076
19,399
798
5,799
8,707
99,269
35.1%
4,447
4,466
30,119
33,287
(70)
4,547
11
157
2,068
7,210
(2,150)
4,176
12
222
1,750
5,912
739
18,737
(289)
611
1,857
12,487
(3,397)
19,399
2
798
5,799
8,707
(3,702)
14,668
69,459
0.21
(2,608)
11,780
70,655
0.17
(9,059)
55,202
69,770
0.79
(8,206)
56,389
71,464
0.79
(in thousands of Canadian dollars)
LTM Adjusted EBITDA
Synergies and Adjusted EBITDA for the months prior to the business acquisitions
which are not already reflected in the results
COVID-19 credits allocated due to mandated store closures
Permanent cost-saving initiatives
Pro Forma Adjusted EBITDA
March 31,
2023
Fiscal 2023
114,140
–
–
2,325
116,465
March 31,
2022
Fiscal 2022
99,269
16,000
1,535
–
116,804
Annual Report 2023 | Stingray Group Inc. | 33
The following table shows the reconciliation of Cash flow from operating activities to Adjusted free cash flow:
(in thousands of Canadian dollars)
Cash flow from operating activities
Add / Less :
Acquisition of property and equipment
Acquisition of intangible assets other than internally
developed intangible assets
Addition to internally developed intangible assets
Interest paid
Repayment of lease liabilities
Net change in non-cash operating working capital items
Unrealized loss (gain) on foreign exchange
Acquisition, legal, restructuring and other expenses
Adjusted free cash flow
3 months
12 months
March 31,
2023
Q4 2023
27,552
March 31,
2022
Q4 2022
22,127
March 31,
2023
Fiscal 2023
86,949
March 31,
2022
Fiscal 2022
83,663
(2,987)
(2,443)
(8,234)
(9,061)
(383)
(1,236)
(6,842)
(1,122)
(7,077)
(206)
7,210
14,909
(355)
(593)
(3,391)
(1,074)
(7,571)
(779)
5,912
11,833
(1,281)
(5,943)
(23,892)
(4,433)
7,482
527
12,487
63,662
(1,134)
(6,854)
(14,384)
(4,815)
24
787
8,707
56,933
The following table shows the calculation of Net debt and Net debt to Pro Forma Adjusted EBITDA ratio:
(in thousands of Canadian dollars)
Credit facilities
Subordinated debt
Cash and cash equivalents
Net debt
Net debt to Pro Forma Adjusted EBITDA
March 31,
2023
360,990
25,543
(15,453)
371,080
3.19
March 31,
2022
358,203
25,442
(14,563)
369,082
3.16
Annual Report 2023 | Stingray Group Inc. | 34
FINANCIAL RESULTS FOR THE QUARTERS AND YEARS ENDED
MARCH 31, 2023 AND 2022
CONSOLIDATED PERFORMANCE
Revenues
Revenues are detailed as follows:
(in thousands of Canadian dollars)
2023
2022 % Change
2023
2022 % Change
3 months
12 months
Revenues by geography
Canada
United States
Other Countries
Revenues
Global
43,667
21,968
13,296
78,931
40,456
19,145
13,043
72,644
7.9
14.7
1.9
8.7
187,032
85,992
50,920
323,944
177,739
52,403
52,484
282,626
5.2
64.1
(3.0)
14.6
Revenues in Q4 2023 increased $6.3 million or 8.7% to $78.9 million, from $72.6 million for Q4 2022. The increase was mainly
due to an increase in equipment and installation sales related to digital signage, an increase in InStore Audio Network revenues
to an increase in Radio revenues driven by growth in digital sales and a positive foreign exchange impact.
Revenues for Fiscal 2023 increased $41.3 million or 14.6% to $323.9 million, from $282.6 million for Fiscal 2022. The increase
was mainly due to the acquisition of InStore Audio Network, to an increase in Radio revenues and in equipment and installation
sales related to digital signage, in-car revenues increase and to a positive foreign exchange impact, partially offset by a
decrease in B2C and Music Video on Demand revenues.
Canada
Revenues in Canada in Q4 2023 increased $3.1 million or 7.9% to $43.6 million, from $40.5 million for Q4 2022. Revenues in
Canada for Fiscal 2023 increased $9.3 million or 5.2% to $187.0 million, from $177.7 million for Fiscal 2022. Both increases
were primarily due to an increase in Radio revenues due to growth in digital sales and to an increase in equipment and
installation sales related to digital signage.
United States
Revenues in the United States in Q4 2023 increased $2.9 million or 14.7% to $22.0 million, from $19.1 million for Q4 2022.
Revenues in the United States for Fiscal 2023 increased $33.6 million or 64.1% to $86.0 million, from $52.4 million for
Fiscal 2022. Both increases were primarily due the acquisition of InStore Audio Network and to a positive foreign exchange
impact.
Other Countries
Revenues in Other countries in Q4 2023 increased $0.3 million or 1.9% to $13.3 million, from $13.0 million for Q4 2022. The
increase was largely due to a positive foreign exchange rate impact.
Revenues in Other countries for Fiscal 2023 decreased $1.6 million or 3.0% to $50.9 million, from $52.5 million for Fiscal 2022.
The decrease was largely due to a decrease in In-store commercial revenues.
Annual Report 2023 | Stingray Group Inc. | 35
Operating expenses
Operating expenses in Q4 2023 increased $1.0 million or 1.8% to $54.6 million, from $53.6 million for Q4 2022. The increase
was mainly due to increased variable expenses due to higher revenues.
Operating expenses for Fiscal 2023 increased $22.3 million or 11.7% to $212.3 million, from $190.0 million for Fiscal 2022.
The increase was primarily due to higher operating costs related to the acquisition of InStore Audio Network, to increased
variable expenses due to higher revenues and to Canadian Emergency Wage Subsidy (CEWS) in the comparative period
(2023; nil, 2022; $5.5 million).
Adjusted EBITDA(1)
Adjusted EBITDA in Q4 2023 increased $5.6 million or 26.4% to $26.6 million from $21.0 million for Q4 2022. Adjusted EBITDA
margin was 33.7% compared to 28.9% for Q4 2022. The increase in Adjusted EBITDA was mainly due to higher revenues. The
increase in Adjusted EBITDA margin was mostly due to lower operating costs in the Broadcasting and Commercial Music
segment resulting from cost-saving initiatives implemented in Fiscal 2023.
Adjusted EBITDA in fiscal 2023 increased $14.8 million, or 15.0%, to $114.1 million from $99.3 million in 2022. Adjusted EBITDA
margin in 2023 reached 35.2% compared to 35.1% in 2022. The improvement in Adjusted EBITDA and EBITDA Margin can
mainly be attributed to the InStore Audio Network acquisition and higher revenues partially offset by the Canadian Emergency
Wage Subsidy (CEWS) in the comparable period.
Depreciation, amortization and write off
Depreciation, amortization and write off decreased $1.0 million or 11.5% to $8.2 million from $9.2 million for Q4 2022.
Depreciation, amortization and write off for Fiscal 2023 decreased $2.5 million or 7.2% to $33.0 million, from $35.5 million for
Fiscal 2022. Both decreases were primarily due to less intangible assets to amortize compared to the prior period as certain
intangible assets are fully amortized.
Net finance expense (income)
Net finance expense for Q4 2023 was $3.7 million compared to a Net finance income of $0.8 million for Q4 2022. The variance
was mainly due to higher interest expense and to a lower gain on fair value of derivative financial instruments.
Net finance expense for Fiscal 2023 was $26.8 million compared to $6.1 million for Fiscal 2022. The increase was mainly due
to a decrease in the fair value of contingent consideration in the comparative period, to higher interest expense and to a gain
on the fair value of derivative financial instruments in the comparative period.
Change in fair value of investments
In Q4 2023 there was no gain or loss on fair value of investments, while for Fiscal 2023, there was a gain of $0.3 million on the
fair value of investments due to the translation of an investment denominated in U.S. dollars to Canadian dollars. In Q4 2022
and in cumulative Fiscal 2022, there was no gain or loss on fair value of investments.
Note:
(1) This is a non-IFRS measure and is not a standardized financial measure. Our 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. Refer to “Supplemental Information on Non-IFRS Measures” on page 31 for more information on each non-IFRS measure and for
reconciliations to the most directly comparable IFRS financial measure, refer to “Non-IFRS Measures Reconciliations” on page 33 and “Reconciliation
of Quarterly Non-IFRS Measures” on page 43.
Annual Report 2023 | Stingray Group Inc. | 36
Acquisition, legal, restructuring and other expenses
(in thousands of Canadian dollars)
Acquisition
Legal
Restructuring and other
Acquisition, legal, restructuring
and other expenses
2023
(118)
2,606
4,722
3 months
2022
Change $
2023
12 months
2022
Change $
39
1,328
4,545
(157)
1,278
177
184
3,673
8,630
282
2,505
5,920
(98)
1,168
2,710
7,210
5,912
1,298
12,487
8,707
3,780
In Fiscal 2023, there was an increase in restructuring and other expenses mainly due to a one-time settlement2 and higher
severance costs and other expenses related to the implementation of a restructuring plan.
Income taxes
The income tax expense recognized in comprehensive income was $0.8 million for Q4 2023 compared to $0.2 million for Q4
2022. The effective tax rate for Q4 2023 was 14.5% compared to 4.1% % for Q4 2022. The variance of the income tax rate
stems from the impact of a different mix in our earnings across the various jurisdictions and due to the variance in permanent
differences.
The income taxes expense recognized in comprehensive income was $9.5 million for Fiscal 2023 compared to $9.0 million
for Fiscal 2022. The effective tax rate for Fiscal 2023 was 24.1% compared to 21.3% for Fiscal 2022. This increase in the
effective tax rate was due to the variance in permanent differences.
Net income and Net income per share
Net income in Q4 2023 was $4.4 million ($0.06 per share) compared to $4.5 million ($0.06 per share) for Q4 2022. The
decrease was mainly related to higher interest expense, to a lower gain on the fair value of derivative financial instruments
and on the fair value of contingent consideration, partially offset by higher operating results.
Net income for Fiscal 2023 was $30.1 million ($0.43 per share) compared to $33.3 million ($0.47 per share) for Fiscal 2022.
The decrease was mainly due to a gain on the fair value of contingent consideration in the comparative period and to higher
interest expense, partially offset by higher operating results.
Adjusted Net income(1) and Adjusted Net income per share(1)
Adjusted Net income in Q4 2023 was $14.7 million ($0.21 per share), compared to $11.8 million ($0.17 per share) for Q4 2022.
The increase was mainly due to higher operating results, partially offset by higher interest expense and by a lower gain in the
fair value of contingent consideration.
Adjusted Net income for Fiscal 2023 was $55.2 million ($0.79 per share), compared to $56.4 million ($0.79 per share) for
Fiscal 2022. The decrease was mainly related to a gain on the fair value of contingent consideration in the comparative period
and to higher interest expense, partially offset by higher operating results.
Note:
(1) This is a non-IFRS measure and is not a standardized financial measure. Our 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. Refer to “Supplemental Information on Non-IFRS Measures” on page 31 for more information on each non-IFRS measure and for
reconciliations to the most directly comparable IFRS financial measure, refer to “Non-IFRS Measures Reconciliations” on page 33 and “Reconciliation
of Quarterly Non-IFRS Measures” on page 43.
(2) The one-time settlement in Stingray Radio of $2.1 million is a retroactive adjustment due to a rate increase effective back to July 1, 2020 on account
of the increase to Re:Sound’s repertoire resulting from U.S. sound recordings becoming eligible for equitable remuneration in Canada through the
coming into force of the Canada-U.S.-Mexico Free Trade Agreement (CUSMA).
Annual Report 2023 | Stingray Group Inc. | 37
BUSINESS SEGMENT PERFORMANCE
BROADCASTING AND COMMERCIAL MUSIC
(in thousands of Canadian dollars)
Revenues
Operating expenses
Adjusted EBITDA(1)
Adjusted EBITDA margin(1)
Revenues
3 months
12 months
2023
50,045
29,631
20,414
40.8%
2022 % Change
9.8
(4.6)
40.6
28.0
45,584
31,060
14,524
31.9%
2023
195,234
118,514
76,720
39.3%
2022 % Change
22.7
17.6
31.6
7.2
159,082
100,767
58,315
36.7%
In Q4 2023, Broadcasting and Commercial Music revenues increased $4.4 million or 9.8% to $50.0 million, from $45.6 million
for Q4 2022. The increase was primarily due to an increase in equipment and installation sales related to digital signage and
to a positive foreign exchange rate impact.
Broadcasting and Commercial Music revenues for Fiscal 2023 increased $36.1 million or 22.7% to $195.2 million from
$159.1 million for Fiscal 2022. The increase was primarily due to the acquisition of InStore Audio Network to an increase in
equipment and installation sales related to digital signage and a positive foreign exchange rate impact, partially offset by a
decrease in audio channel revenues.
Adjusted EBITDA(1)
In Q4 2023, Broadcasting and Commercial Music Adjusted EBITDA increased $5.9 million or 40.6% to $20.4 million from
$14.5 million for Q4 2022. The increase was mainly due to an increase in gross margin due to higher revenue and to a decrease
in operating expenses.
Broadcasting and Commercial Music Adjusted EBITDA for Fiscal 2023 increased $18.4 million or 31.6% to $76.7 million from
$58.3 million for Fiscal 2022. The increase was mainly due to the acquisition of InStore Audio Network and to an increase in
gross margin due to higher revenue, partially offset by CEWS in Fiscal 2022.
Note:
(1) This is a non-IFRS measure and is not a standardized financial measure. Our 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. Refer to “Supplemental Information on Non-IFRS Measures” on page 31 for more information on each non-IFRS measure and for
reconciliations to the most directly comparable IFRS financial measure, refer to “Non-IFRS Measures Reconciliations” on page 33 and “Reconciliation
of Quarterly Non-IFRS Measures” on page 43.
Annual Report 2023 | Stingray Group Inc. | 38
RADIO
(in thousands of Canadian dollars)
Revenues
Operating expenses
Adjusted EBITDA(1)
Adjusted EBITDA margin(1)
Revenues
3 months
12 months
2023
28,886
21,209
7,677
26.6%
2022 % Change
6.7
10.4
(2.3)
(8.5)
27,060
19,203
7,857
29.0%
2023
128,710
85,804
42,906
33.3%
2022 % Change
4.2
11.0
(7.2)
(10.9)
123,544
77,309
46,235
37.4%
Radio revenues are derived from the sale of advertising airtime, which is subject to the seasonal fluctuations of the Canadian
radio industry. Accordingly, the first and third quarter results tend to be the strongest and the second and fourth quarter results
tend to be the weakest in a fiscal year.
In Q4 2023, Radio revenues increased $1.8 million or 6.7% to $28.9 million from $27.1 million for Q4 2022. Radio revenues for
Fiscal 2023 increased $5.2 million or 4.2% to $128.7 million from $123.5 million for Fiscal 2022. Both increases were largely
due to growth in local airtime and digital revenues.
Adjusted EBITDA(1)
In Q4 2023, Radio Adjusted EBITDA decreased $0.2 million or 2.3% to $7.7 million from $7.9 million for Q4 2022. The decrease
was primarily due to the effect of one-time allowance for doubtful accounts accrual reversals in the prior period.
Radio Adjusted EBITDA for Fiscal 2023 decreased $3.3 million or 7.2% to $42.9 million from $46.2 million for Fiscal 2022. The
decrease was mostly related to CEWS in the comparative period.
Note:
(1) This is a non-IFRS measure and is not a standardized financial measure. Our 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. Refer to “Supplemental Information on Non-IFRS Measures” on page 31 for more information on each non-IFRS measure and for
reconciliations to the most directly comparable IFRS financial measure, refer to “Non-IFRS Measures Reconciliations” on page 33 and “Reconciliation
of Quarterly Non-IFRS Measures” on page 43.
Annual Report 2023 | Stingray Group Inc. | 39
CORPORATE
(in thousands of Canadian dollars)
Operating expenses
Adjust:
Share-based compensation
Performance and deferred share
unit expense
Adjusted EBITDA(1)
Adjusted EBITDA(1)
3 months
12 months
2023
3,743
2022 % Change
12.4
3,330
2023
7,954
2022 % Change
(33.0)
11,878
(157)
(222)
(29.3)
(611)
(798)
(23.4)
(2,068)
(1,518)
(1,750)
(1,358)
18.1
11.8
(1,857)
(5,486)
(5,799)
(5,281)
(68.0)
3.9
Corporate Adjusted EBITDA represents the head office operating expenses less the share-based compensation and
performance and deferred share unit expense. The decrease in operating expenses for cumulative Fiscal 2023 is related to a
loss on performance and deferred share units expense due to a decrease in the share price.
Note:
(1) This is a non-IFRS measure and is not a standardized financial measure. Our 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. Refer to “Supplemental Information on Non-IFRS Measures” on page 31 for more information on each non-IFRS measure and for
reconciliations to the most directly comparable IFRS financial measure, refer to “Non-IFRS Measures Reconciliations” on page 33 and “Reconciliation
of Quarterly Non-IFRS Measures” on page 43.
Annual Report 2023 | Stingray Group Inc. | 40
Quarterly results
Revenues fluctuated over the last eight quarters from $64.3 million in the first quarter of Fiscal 2022 to $78.9 million in the
fourth quarter of Fiscal 2023. The increase in Q2 2022 was due to the gradual easing of COVID-19 restrictions, increased
equipment and installation sales related to digital signage and the acquisition of Calm Radio. In Q3 2022, the increase was
mainly due to normal business seasonality and to an increase in subscription revenues. The decrease in Q4 2022 is mostly
due to normal business seasonality, partially offset by the acquisition of InStore Audio Network. The increase in Q1 2023 and
the decrease in Q2 2023 were mainly due to normal business seasonality. The increase in Q3 2023 was mostly due to normal
business seasonality, to a positive foreign exchange impact and to an increase in equipment and installation sales related to
digital signage. The decrease in Q4 2023 was mainly due to normal business seasonality.
Adjusted EBITDA(1) fluctuated over the last eight quarters from $24.2 million in the first quarter of Fiscal 2022 to $26.6 million
in the fourth quarter of Fiscal 2023. The increase in Q2 2022 is due to higher operating results, partially offset by reduced
CEWS. In Q3 2022, the increase was mainly due to normal business seasonality. The decrease in Q4 2022 was mainly due to
normal business seasonality and reduced CEWS, partially offset by the acquisition of InStore Audio Network. The increase in
Q1 2023 was primarily due to normal business seasonality. The increase in Q2 2023 was mainly due to lower operating costs.
The increase in Q3 2023 and the decrease in Q4 2023 were mainly due to normal business seasonality.
Net income fluctuated over the last eight quarters from $4.2 million in the first quarter of Fiscal 2022 to $4.4 million in the fourth
quarter of Fiscal 2023. In Q2 2022, the increase was due a positive change in the fair value of contingent consideration, a
positive change in fair value of derivative financial instruments and higher operating results, partially offset by a foreign
exchange loss. In Q3 2022, the increase was mainly due to higher operating results, partially offset by a lower gain related to
the change in the fair value of contingent consideration. The decrease in Q4 2022 was primarily due to lower operating results
due to normal business seasonality and to higher restructuring and other expenses, partially offset by lower income tax
expense. The increase in Q1 2023 was mainly due to higher operating results and lower restructuring and other costs, partially
offset by an increase in the fair value of contingent consideration. The decrease in Q2 2023 was primarily due to a loss on the
fair value of derivative financial instruments, a foreign exchange loss and higher interest expenses, partially offset by lower
income tax expense. The increase in Q3 2023 was mainly due to higher operating results and to a gain on the fair value of
derivative financial instruments, partially offset by higher income tax expense. The decrease in Q4 2023 was mainly due to
lower operating results, to higher restructuring and other costs and to higher performance and deferred share units expense,
partially offset by lower income tax expense.
Note:
(1) This is a non-IFRS measure and is not a standardized financial measure. Our 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. Refer to “Supplemental Information on Non-IFRS Measures” on page 31 for more information on each non-IFRS measure and for
reconciliations to the most directly comparable IFRS financial measure, refer to “Non-IFRS Measures Reconciliations” on page 33 and “Reconciliation
of Quarterly Non-IFRS Measures” on page 43.
Annual Report 2023 | Stingray Group Inc. | 41
Summary of Consolidated Quarterly Results
(in thousands of Canadian dollars,
except per share amounts)
March 31,
2023
Dec. 31,
2022
Sept. 30,
2022
June 30,
2022
March 31,
2022
3 months
FY2023
FY2023
FY2023
FY2023
FY2022
Dec. 31,
2021
Recast(2)
FY2022
Sept. 30,
2021
Recast(2)
FY2022
June 30,
2021
Recast(2)
FY2022
Revenues by segment
Broadcasting and Commercial
Music
Radio
Total revenues
Revenues by geography
Canada
United States
Other countries
Total revenues
Adjusted EBITDA(1)
LTM Adjusted EBITDA(1)
Net income
Net income per share basic and
diluted
Adjusted Net income(1)
Adjusted Net income per share
basic(1)
Adjusted Net income per share
diluted(1)
Cash flow from operations
Adjusted free Cash Flow(1)
Quarterly dividend
50,045
28,886
78,931
54,158
35,084
89,242
44,901
32,734
77,635
46,130
32,006
78,136
45,584
27,060
72,644
40,085
34,943
75,028
38,392
32,311
70,703
35,021
29,230
64,251
43,667
21,968
13,296
78,931
49,471
26,561
13,210
89,242
47,236
18,360
12,039
77,635
46,658
19,103
12,375
78,136
26,573
114,140
4,447
34,450
108,590
12,944
27,031
102,644
3,331
26,086
101,200
9,397
40,456
19,145
13,043
72,644
21,023
99,269
4,466
49,286
12,588
13,154
75,028
46,659
10,853
13,191
70,703
41,338
9,817
13,096
64,251
28,504
101,884
12,546
25,587
107,373
12,075
24,155
112,942
4,200
0.06
14,668
0.19
16,464
0.05
10,825
0.13
13,245
0.06
11,780
0.18
17,048
0.17
16,323
0.06
11,238
0.21
0.24
0.16
0.19
0.17
0.24
0.23
0.16
0.21
27,552
14,909
0.075
0.24
24,605
18,085
0.075
0.15
18,446
15,009
0.075
0.19
16,346
15,659
0.075
0.17
22,127
11,833
0.075
0.24
24,762
14,731
0.075
0.23
20,437
15,362
0.075
0.16
16,337
15,007
0.075
Notes:
(1)
This is a non-IFRS measure and is not a standardized financial measure. Our 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. Refer to “Supplemental Information on Non-IFRS Measures” on page 31 for more information on each non-IFRS measure
and for reconciliations to the most directly comparable IFRS financial measure, refer to “Non-IFRS Measures Reconciliations” on page 33 and
“Reconciliation of Quarterly Non-IFRS Measures” on page 43.
(2) The figures of Q3 2022, Q2 2022 and Q1 2022 have been recast to adjust certain contracts that were recognized on a gross basis that should have
been recognized on net basis. This had the effect of reducing revenues and operating expenses of the Broadcasting and commercial music segment
from previously recorded. Revenues have been recast from $41.0 million to $40.1 million for Q3 2022, from $39.1 million to 38.4 million for Q2 2022
and from $35.6 million to $35.0 million for Q1 2022, respectively.
Annual Report 2023 | Stingray Group Inc. | 42
Reconciliation of Quarterly Non-IFRS Measures
Adjusted EBITDA, Pro Forma Adjusted EBITDA, LTM Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net income,
Adjusted Net income per share, Adjusted free cash flow, Adjusted free cash flow per share, Net debt and Net debt to Pro
Forma Adjusted EBITDA ratio are non-IFRS measures that the Corporation uses to assess its operating performance. Refer to
“Supplemental information on Non-IFRS Measures” on page 31.
The following tables show the reconciliation of Net income to Adjusted EBITDA, to Adjusted Net income, to LTM Adjusted
EBITDA and to Pro Forma Adjusted EBITDA:
(in thousands of Canadian dollars)
Net income
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
March 31,
2023
FY2023
4,447
3,749
11
753
Dec. 31,
2022
FY2023
12,944
7,205
68
5,037
Sept. 30,
2022
FY2023
3,331
11,906
(247)
611
3 months
June 30,
2022
FY2023
9,397
3,975
(121)
3,139
March 31,
2022
FY2022
4,466
(769)
12
191
Dec. 31,
2021
FY2022
12,546
1,999
3
4,115
Sept. 30,
2021
FY2022
12,075
(364)
(13)
2,874
June 30,
2021
FY2022
4,200
5,253
–
1,833
2,406
1,225
4,547
157
1,784
1,092
4,596
153
2,876
1,066
4,822
164
2,671
1,123
4,772
137
3,862
1,201
4,176
222
2,237
1,281
4,669
216
2,446
1,298
4,927
196
2,524
1,296
5,627
164
unit expense
2,068
(238)
427
(400)
1,750
659
1,300
2,090
2,075
27,031
34.8%
3,331
1,393
26,086
33.4%
9,397
5,912
21,023
28.9%
4,466
779
28,504
38.0%
12,546
848
25,587
36.2%
12,075
1,168
24,155
37.6%
4,200
Acquisition, legal, restructuring and
other expenses
Adjusted EBITDA
Adjusted EBITDA margin
Net Income
Adjusted for:
Change in fair value of derivative
financial instruments
Amortization of intangible assets
Change in fair value of investments
Share-based compensation
Performance and deferred share
7,210
26,573
33.7%
4,447
(70)
4,547
11
157
1,809
34,450
38.6%
12,944
(1,642)
4,596
68
153
2,996
4,822
(247)
164
(545)
4,772
(121)
137
(2,150)
4,176
12
222
(248)
4,669
3
216
659
779
(1,517)
4,927
(13)
196
518
5,627
–
164
1,300
2,090
848
1,168
unit expense
2,068
(238)
427
(400)
1,750
Acquisition, legal, restructuring and
other expenses
7,210
1,809
2,075
1,393
5,912
Income taxes related to change in
fair value of investments, share-
based compensation,
performance and deferred share
unit expense, amortization of
intangible assets, change in fair
value of derivative financial
instruments and acquisition,
legal, restructuring and other
expenses
Adjusted Net income
Average number of shares
outstanding (diluted)
Adjusted Net income per share
(3,702)
14,668
(1,226)
16,464
(2,743)
10,825
(1,388)
13,245
(2,608)
11,780
(1,576)
17,048
(1,493)
16,323
(2,529)
11,238
69,459
69,678
70,008
70,277
70,655
70,960
71,978
72,363
diluted
0.21
0.24
0.15
0.19
0.17
0.24
0.23
0.16
Annual Report 2023 | Stingray Group Inc. | 43
(in thousands of Canadian dollars)
LTM Adjusted EBITDA
Synergies and Adjusted
EBITDA for the months prior
to the business acquisitions
which are not already
reflected in the results
COVID-19 credits allocated due
to mandated store closures
Permanent cost-saving
initiatives
Pro Forma Adjusted EBITDA
3 months
March 31,
2023
FY2023
Dec. 31,
2022
FY2023
Sept. 30,
2022
FY2023
June 30,
2022
FY2023
March 31,
2022
FY2022
Dec. 31,
2021
FY2022
Sept. 30,
2021
FY2022
June 30,
2021
FY2022
114,140
108,590
102,644
101,200
99,269
101,884
107,373
112,942
–
–
–
–
7,450
11,900
16,000
19,500
1,428
842
–
699
1,535
3,051
2,492
1,369
2,325
116,465
5,074
113,664
–
110,094
–
113,799
–
116,804
–
124,435
–
111,293
–
115,153
The following table shows the reconciliation of Cash flow from operating activities to Adjusted free cash flow:
(in thousands of Canadian dollars)
Cash flow from operating
activities
Acquisition of property and
equipment
Acquisition of intangible assets
other than internally developed
intangible assets
Addition to internally developed
intangible assets
Interest paid
Repayment of lease liabilities
Net change in non-cash operating
3 months
March 31,
2023
FY2023
Dec. 31,
2022
FY2023
Sept. 30,
2022
FY2023
June 30,
2022
FY2023
March 31,
2022
FY2022
Dec. 31,
2021
FY2022
Sept. 30,
2021
FY2022
June 30,
2021
FY2022
27,552
24,605
18,446
16,346
22,127
24,762
20,437
16,337
(2,987)
(1,997)
(2,099)
(1,151)
(2,443)
(2,181)
(2,360)
(2,077)
(383)
(532)
(89)
(277)
(355)
(276)
(305)
(198)
(1,236)
(6,842)
(1,122)
(1,978)
(6,882)
(974)
(1,165)
(5,916)
(1,280)
(1,564)
(4,252)
(1,057)
(593)
(3,391)
(1,074)
(2,058)
(3,868)
(1,130)
(2,050)
(3,234)
(1,526)
(2,153)
(3,891)
(1,085)
working capital items
(7,077)
3,376
3,727
7,456
(7,571)
(1,533)
2,323
6,805
Unrealized loss (gain) on foreign
exchange
Acquisition, legal, restructuring and
other expenses
Adjusted free cash flow
(206)
658
1,310
(1,235)
(779)
236
1,229
101
7,210
14,909
1,809
18,085
2,075
15,009
1,393
15,659
5,912
11,833
779
14,731
848
15,362
1,168
15,007
The following table shows the calculation of Net debt and of Net debt to Pro Forma Adjusted EBITDA ratio:
3 months
(in thousands of Canadian dollars)
Credit facilities
Subordinated debt
Cash and cash equivalents
Portion of the balance payable on
acquisition of InStore Audio
Network paid on January 5,
2022
Net debt
Net debt to Pro Forma Adjusted
March 31,
2023
FY2023
360,990
25,543
(15,453)
Dec. 31,
2022
FY2023
366,168
25,517
(12,303)
Sept. 30,
2022
FY2023
368,442
25,492
(15,411)
June 30,
2022
FY2023
358,440
25,467
(13,816)
March 31,
2022
FY2022
358,203
25,442
(14,563)
Dec. 31,
2021
FY2022
317,957
25,416
(11,266)
Sept. 30,
2021
FY2022
313,172
31,791
(8,475)
June 30,
2021
FY2022
305,779
31,766
(6,416)
–
371,080
–
379,382
–
378,523
–
370,091
–
369,082
42,471
374,578
–
336,488
–
331,129
EBITDA
3.19
3.34
3.44
3.25
3.16
3.01
3.02
2.88
Annual Report 2023 | Stingray Group Inc. | 44
LIQUIDITY AND CAPITAL RESOURCES FOR THE QUARTERS AND YEARS ENDED
MARCH 31, 2023 AND 2022
(in thousands of Canadian dollars)
Operating activities
Financing activities
Investing activities
Net change in cash
Cash – beginning of period
Cash – end of period
Adjusted free cash flow(1)
Operating Activities
3 months
12 months
2023
27,552
(19,120)
(5,282)
3,150
12,303
15,453
14,909
2022
22,127
(15,430)
(3,400)
3,297
11,266
14,563
11,833
2023
86,949
(65,454)
(20,605)
890
14,563
15,453
63,662
2022
83,663
(59,510)
(18,630)
5,523
9,040
14,563
56,933
Cash flow generated from operating activities amounted to $27.6 million for Q4 2023 compared to $22.1 million for Q4 2022.
The increase was primarily due to higher operating results.
Cash flow generated from operating activities amounted to $86.9 million for Fiscal 2023 compared to $83.7 million for
Fiscal 2022. The increase was mainly due to higher operating results, partially offset by higher negative change in non-cash
operating items and higher restructuring and other costs.
Financing Activities
Net cash flow used in financing activities amounted to $19.1 million for Q4 2023 compared to $15.4 million for Q4 2022. The
increase was mostly due to repayment of credit facilities and to higher interest paid, partially offset by the repayment of the
balance payable for the acquisition of InStore Audio Network in the comparative period.
Net cash flow used in financing activities amounted to $65.5 million for Fiscal 2023 compared to $59.5 million for Fiscal 2022.
The increase was mainly related to higher credit facilities borrowing and higher interest paid, partially offset by the repayment
of the balance payable for the acquisition of InStore Audio Network in the comparative period, by lower shares repurchased
of cancelled and by a partial repayment of the subordinated debt in the comparative period.
Investing Activities
Net cash flow used in investing activities amounted to $5.3 million for Q4 2023 compared to $3.4 million for Q4 2022. The
increase was mainly due to higher additions to internally developed intangible assets and to higher acquisitions of property
and equipment.
Net cash flow used in investing activities amounted to $20.6 million for Fiscal 2023 compared to $18.6 million for Fiscal 2022.
The increase was primarily due to the payment of net working capital related to the acquisition of InStore Audio Network,
partially offset by the acquisition of a minority interest in The Singing Machine in Q2 2022.
Adjusted free cash flow(1)
Adjusted free cash flow generated in Q4 2023 amounted to $14.9 million compared to $11.8 million for Q4 2022. Adjusted free
cash flow generated in Fiscal 2023 amounted to $63.7 million compared to $56.9 million for Fiscal 2022. Both increases were
mainly related to higher operating results, partially offset by higher interest paid.
Note
(1) This is a non-IFRS measure and is not a standardized financial measure. Our 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. Refer to “Supplemental Information on Non-IFRS Measures” on page 31 for more information on each non-IFRS measure and for
reconciliations to the most directly comparable IFRS financial measure, refer to “Non-IFRS Measures Reconciliations” on page 33 and “Reconciliation
of Quarterly Non-IFRS Measures” on page 43.
Annual Report 2023 | Stingray Group Inc. | 45
Contractual Obligations
The Corporation is committed under the terms of contractual obligations with various expiration dates, primarily the rental of
properties and equipment, broadcast licences commitments and financial obligations under our credit agreement and
subordinated debt. The following table summarizes the Corporation’s undiscounted significant contractual obligations as at
March 31, 2023, including its estimated payments and commitments related to leasing contracts:
(in thousands of Canadian dollars)
Lease liabilities
Operating obligations
Broadcast licences commitments
Credit facilities
Subordinated debt
Accounts payables and accrued liabilities
Other liabilities
Total obligations
Broadcast licences and royalties
Less than
1 year
1,361
2,961
7,124
7,500
–
74,826
25,774
119,546
1 to 5
years
19,213
2,307
7,640
354,354
25,600
–
7,338
416,452
More
than 5
years
13,295
1,617
–
–
–
–
1,836
16,748
Total
33,869
6,885
14,764
361,854
25,600
74,826
34,948
552,746
A condition of the broadcast licences owned by the Corporation is to commit to fund Canadian Content Development (“CCD”)
over the initial term of the licences, which is usually seven years. The Corporation must also pay royalties for the use of music
for the majority of its music services. Through copyright collective societies, the Corporation pays royalties to two sets of rights
holders: rights holders in music works, which are the music and the lyrics; and, rights holders in artists’ performances and
sounds recordings, which are the actual performances and recordings of the musical works.
Annual Report 2023 | Stingray Group Inc. | 46
Capital resources
Our principal sources of liquidity are our net cash provided by operating activities and borrowings available under our revolving
facility. Our principal uses of cash are to repay our debt, finance our acquisitions and capital expenditures, pay dividends,
repurchase shares and provide for working capital. We expect that cash generated from operations and borrowings available
under our current credit facilities will be sufficient to meet our liquidity needs in the foreseeable future.
The credit facilities consist of a $375.0 million revolving credit facility and a $56.3 million term loan, both maturing in October
2026.
The Corporation is required to make consecutive quarterly capital repayments of 2.50% of the initial drawdown of the term
loan. The remaining capital balance will be payable on maturity date, on October 25, 2026.
The credit facilities bear interest at (a) the bank’s prime rate (6.70% and 2.70% as at March 31, 2023 and 2022, respectively)
or US base rate if denominated in US dollars (9.25% and 4.00% as at March 31, 2023 and 2022, respectively) plus an applicable
margin based on a financial covenant, or (b) the banker’s acceptance rate (5.07% and 0.73% as at March 31, 2023 and 2022,
respectively) plus an applicable margin based on a financial covenant, or (c) LIBOR (4.84% and 0.21% as at March 31, 2023
and 2022, respectively) plus an applicable margin based on a financial covenant, at the Corporation’s option. In addition, the
Corporation incurs standby fees based on a financial covenant, on the unused portion of the credit facilities (0.40% for the
years ended March 31, 2023 and 2022).
As of March 31, 2023, the Corporation had cash and cash equivalents of $15.5 million, a subordinated debt of $25.5 million
and credit facilities of $361.0 million, of which approximately $68.6 million was available.
The following table summarizes the impact on the Net debt(2) that occurred in the fiscal year ended March 31, 2023 including
related ratios:
Movement in Net debt(1)(2)
$20.9
$(51.5)
$23.9
$4.4
$369.1
$4.3
As at March
31, 2022
Business
acquisitions
outlays,
balance
payable and
contingent
consideration
payments
Interests
payments
Share
repurchases
Dividend
payments
$371.1
As at March
31, 2023
Remaining net
change of
revolving
facility and
cash
Notes:
In millions of Canadian dollars.
(1)
(2) This is a non-IFRS measure and is not a standardized financial measure. Our 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. Refer to “Supplemental Information on Non-IFRS Measures” on page 31 for more information on each non-IFRS measure and for
reconciliations to the most directly comparable IFRS financial measure, refer to “Non-IFRS Measures Reconciliations” on page 33 and “Reconciliation
of Quarterly Non-IFRS Measures” on page 43.
Annual Report 2023 | Stingray Group Inc. | 47
CONSOLIDATED FINANCIAL POSITION
The following table shows the main variances that have occurred in the consolidated financial position of the Corporation for
the year ended March 31, 2023:
(in thousands of Canadian
dollars)
March 31,
2023
March 31,
2022
Variance
Trade and other receivables
71,251
66,666
4,585 ▲
Intangible assets
Goodwill
Accounts payables and
accrued liabilities
Other liabilities
Credit facilities
68,814
360,900
76,230
354,679(1)
(7,416) ▼
6,221 ▲
74,826
67,391(1)
7,435 ▲
47,984
60,997
(13,013) ▼
360,990
358,203
2,787 ▲
Subordinated debt
25,543
25,442
101 ▲
Significant contributions
Timing of payments by clients
and increase in revenues
Amortization of intangible assets
Foreign exchange differences
Timing of payments to suppliers
and higher operating costs
Payments for CRTC tangible
benefits
Refer to the graph on previous
page
Amortization of deferred
financing fees
Note:
(1) Recast. Refer to note 3 of the consolidated financial statements.
SOCAN and Re:Sound legal proceedings
In May 2017, the Corporation, together with its Canadian Broadcast Distribution Undertaking customers (together, the
“Objectors”), presented an affirmative case before the Copyright Board of Canada to seek a reduction in the prescribed rates
and terms for the Pay Audio Services Tariff for the 2007-2016 period. SOCAN and Re:Sound (together, the “Collectives”)
opposed that case, but in the opinion of the Objectors failed to offer compelling alternatives other than a request to maintain
the status quo.
As of December 2020, the Objectors and SOCAN entered into a binding MOU that will result in a partial refund to the Objectors
of past royalties paid and a meaningfully reduced tariff burden for the present and future. On May 28, 2021, the Copyright
Board of Canada released a final decision relating to the Pay Audio Services Tariff. The decision and certified tariff were in line
with the Objectors expectations.
Transactions Between Related Parties
The key management personnel of the Corporation are the Chief Executive Officer, Chief Financial Officer and certain other
key employees of the Corporation.
Key management personnel compensation and director’s fees include the following:
(in thousands of Canadian dollars)
Short-term employee benefits
Share-based compensation
Performance share units
Deferred share units
Off-Balance Sheet Arrangements
12 months
2023
2022
5,444
358
1,213
(282)
6,733
5,074
525
2,533
954
9,086
The Corporation therefore has no off-balance sheet arrangements, except for the operating leases with terms of twelve months
or less, leases of low-value assets or leases that are not in scope of IFRS 16, that have, or are reasonably likely to have, a
current or future material effect on its consolidated financial position, financial performance, liquidity, capital expenditures or
capital resources.
Annual Report 2023 | Stingray Group Inc. | 48
Disclosure of Outstanding Share Data
Issued and outstanding shares and outstanding stock options consisted of:
Issued and outstanding shares:
Subordinate voting shares
Subordinate voting shares held in trust through employee share
purchase plan
Variable subordinate voting shares
Multiple voting shares
Outstanding stock options:
Stock options
June 2, 2023
March 31, 2023
50,977,650
50,978,450
(7,598)
402,452
17,941,498
69,314,002
(1,802)
401,652
17,941,498
69,319,798
3,489,333
3,489,333
The Corporation has a stock option plan to attract and retain employees, directors, officers and consultants. The plan provides
for the granting of options to purchase subordinate voting shares. Under this plan,10% of all multiple voting shares, subordinate
voting shares and variable subordinate voting shares issued and outstanding on a non-diluted basis is reserved for issuance.
In Fiscal 2023, no options were exercised, 147,177 options were cancelled and 166,701 options were granted to eligible
employees, subject to service vesting periods of 4 years.
Financial Risk Factors
Currency risk:
The Corporation is exposed to currency risk on sales and expenses that are denominated in currencies other than the
functional currency of the Corporation’s subsidiaries, primarily the US dollar (“USD”) and the euro (“EURO”). Also, additional
earnings variability arises from the translation of monetary assets and liabilities denominated in currencies other than the
functional currency of the Corporation’s subsidiaries at the rate of exchange at each balance sheet date, the impact of which
is reported as a foreign exchange gain or loss in the consolidated statements of comprehensive income.
The Corporation's objective in managing its foreign currency risk is to minimize its net exposure to foreign currency cash flows,
by transacting with third parties in the above currencies to the maximum extent possible and practical, given that this will act
as natural economic hedges for each of these currencies.
The table below summarizes the FX forward contracts effective as at March 31, 2023
Type
Contract
exchange rate
Contractual
amount
Mark-to-market
liabilities (assets) as at
March 31, 2023
USD Sale
USD Sale
1.2831 – 1.3000
1.3260 – 1.3565
24,000
24,000
48,000
1,121
(106)
1,015
FX Forward
0 to 12 months
13 to 24 months
Liquidity risk:
Liquidity risk is the risk that the Corporation will not be able to meet its financial obligations as they become due. The
Corporation manages liquidity risk by continuously monitoring actual and budgeted cash flows under both normal and stressed
conditions. The Board of Directors also reviews and approves the Corporation’s operating and capital budgets, as well as any
material transactions out of the ordinary course of business, including proposals on mergers, acquisitions or other major
investments or divestitures.
Annual Report 2023 | Stingray Group Inc. | 49
Interest rate risk:
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in
market interest rates. The Corporation holds the majority of its cash and cash equivalents balance in accounts bearing interest
at rates less than 1.25%. The Corporation is, therefore, not materially exposed to future cash flow fluctuations coming from
changes in market interest rates for its cash and cash equivalents. Cash equivalents consist of term deposits with original
maturities of less than three months and are, therefore, also exposed to interest rate risk on fair value. However, fair value risk
is not significant, considering the relatively short term to maturity of these instruments.
The credit facility is a variable interest rate instrument that is due in more than one year. This instrument is exposed to changes
in future interest rates that could result in future cash flow fluctuations. To manage its interest rate risk, the Corporation entered
into the following interest rate swap agreements:
(in thousands of Canadian dollars)
Currency
Fixed interest rate
(when applicable)
Initial nominal
value
Mark-to-market
liabilities (assets)
as at
March 31, 2023
Mark-to-market
liabilities (assets)
as at
March 31, 2022
CAD
CAD
—
—
100,000
100,000
200,000
CAD
3.5975%
70,000
$ 270,000
$
(490)
(699)
(1,189)
1
(1,188)
$
(604)
(860)
(1,464)
—
(1,464)
Maturity
Swaptions
October 25, 2024
October 25, 2024
Swap
September 29, 2026
Credit risk:
Credit risk is the risk of an unexpected financial loss to the Corporation if a customer or counterparty to a financial instrument
fails to meet contractual obligations, and it arises primarily from the Corporation's trade and other receivables.
The Corporation’s credit risk is principally attributable to its trade receivables. The amounts presented in the consolidated
statements of financial position are net of an allowance for expected credit risk, estimated by the Corporation’s management
and based, in part, on the age of the specific receivable balance and the current and expected collection trends. The
Corporation's exposure to credit risk is mainly influenced by the characteristics of each customer. Generally, the Corporation
does not require collateral or other security from customers for trade receivables; however, credit is extended following an
evaluation of creditworthiness. In addition, the Corporation performs ongoing credit reviews of its customers.
An allowance for expected credit losses is maintained to reflect an impairment risk for trade accounts receivable based on an
expected credit loss model. Bad debts are also provided for based on collection history and specific risks identified on a
customer-by-customer basis.
Critical Accounting Estimates
The preparation of the Corporation’s consolidated financial statements in conformity with International Financial Reporting
Standards (“IFRS”) requires management to make judgments, estimates and assumptions that affect the application of
accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these
estimates.
Below is an overview of the areas that involved more judgement or complexity, and of items which are more likely to be
materially adjusted due to estimates and assumptions turning out to be wrong. Estimates are based on management’s best
knowledge of current events and actions that the Corporation may undertake in the future. Estimates and underlying
assumptions are reviewed on an ongoing basis. Any revision to accounting estimates are recognized in the period in which
the estimates are revised and in any future periods affected by these revisions.
The areas involving significant estimates or judgments are:
Estimation of current tax payable and current tax expense
In the calculation of current tax, the Corporation is required to make significant estimates due to the fact that it is subject to tax
laws of the many jurisdictions in which it operates. Recorded income taxes and tax credits are subject to review and approval
by tax authorities and therefore, could be different from the amounts recorded.
Annual Report 2023 | Stingray Group Inc. | 50
Recognition of deferred tax assets for tax losses available for carry-forward
In the calculation of deferred tax, estimates must be used to determine the appropriate rates and amounts and to take into
account the probability of their occurrence. Deferred income tax assets also reflect the benefit of unutilized tax losses that can
be carried forward to reduce income taxes in future years. The deferred tax assets include an amount which relates to carried
forward tax losses of some European and Australian subsidiaries. The subsidiaries have incurred the losses over the last
financial years before the acquisition by the Corporation. The subsidiaries now generate taxable income. The Corporation has
concluded that the deferred assets will be recoverable using the estimated future taxable income based on the approved
business plans and budgets for the subsidiaries.
Estimation of cost of defined benefit pension plans and present value of the net pension obligation
The cost of defined benefit pension plans and the present value of the net pension obligation are determined using actuarial
valuations. An actuarial valuation involves making various assumptions which may differ from actual developments in the future.
These include the determination of the discount rate, mortality rates and future pension increases. Due to the complexity of
the valuation, the underlying assumptions and its long-term nature, the net pension obligation is highly sensitive to changes in
these assumptions.
Management engages the services of external actuaries to assist in the determination of the appropriate discount rate.
Management, with the assistance of actuaries, considers the interest rates of high quality corporate bonds that have terms to
maturity approximating the terms related to the defined benefit obligation. The mortality rate is based on publicly available
mortality tables. Future pension increases are based on expected future inflation rates.
Estimated fair value of certain investments
The fair value of investments that are not traded in an active market is determined using valuation techniques. The Corporation
uses judgement to select a valuation method and make assumptions that are mainly based on market conditions existing at
the end of each reporting period.
Estimated value in use and/or fair value less costs to sell of CGUs used in goodwill and broadcasting licences impairment
testing
Broadcast licences and goodwill are not amortized but are tested annually for impairment, or more frequently if events or
circumstances indicate that it is more likely than not that the value of broadcast licences and/or goodwill may be impaired.
Impairment exists when the carrying value of an asset or cash generating unit (“CGU”) exceeds its recoverable amount, which
is the higher of its fair value less costs to sell and its value-in-use. The fair value less costs to sell calculation is based on
available data from binding sales transactions in an arm’s-length transaction of similar assets, observable market prices, or
discounted cash flow projections less incremental costs for disposing of the asset. The value-in-use calculation is based on a
discounted cash flow model. The cash flows are derived from the budget for the next five years and do not include restructuring
activities that the Corporation is not yet committed to or significant future investments that will enhance the asset’s performance
of the CGU being tested. The recoverable amount is most sensitive to the discount rate used for the discounted cash flow
model as well as the expected future cash inflows and the growth rate used for extrapolation purposes. The impact of COVID-19
on the Corporation was also considered in calculating the future cash flows. Depending on the measures taken by the federal
and provincial authorities to slow or stop the spread of COVID-19, such as the closure of non-essential businesses and social
distancing, actual results could differ materially from estimates used.
Estimation of fair value of identified assets, liabilities and contingent consideration recorded in business acquisitions
The contingent consideration and balance payable on business acquisitions related to business combinations is payable based
on the achievement of targets for growth in revenues for a period from the date of the acquisition and upon renewal of client
contracts. The fair value of the contingent consideration and balance payable on business acquisitions were estimated by
calculating the present value of the future expected cash flows.
Estimation of lease term of contracts with renewal options
The Corporation determines the lease term as the non-cancellable term of the lease, together with any periods covered by an
option to extend the lease if it is reasonably certain to be exercised, or any periods covered by an option to terminate the lease,
if it is reasonably certain not to be exercised. After the commencement date, the Corporation reassesses the lease term for
whether significant event or change in circumstances that is within its control and affects its ability to exercise (or not to
exercise) the option to renew (e.g., a change in business strategy) has occurred.
Annual Report 2023 | Stingray Group Inc. | 51
Business Combinations
Under the acquisition method, on the date that control is obtained, the identifiable assets, liabilities and contingent liabilities of
the acquired business are measured at their fair values. Depending on the complexity of determining the valuation for certain
assets, the Corporation uses appropriate valuation techniques in arriving at the estimated fair value at the acquisition date for
these assets. These valuations are generally based on a forecast of the total expected future net discounted cash flows and
relate closely to the assumptions made by management regarding the future performance of the related assets and the
discount rate applied as it would be assumed by a market participant.
New standard adopted by the Corporation
There are no new standards adopted by the Corporation as of March 31, 2023.
Future Accounting Changes
There are no material future accounting changes as of March 31, 2023.
Evaluation of Disclosure Controls and Procedures and Internal Control Over Financial Reporting
Internal control over financial reporting ("ICFR") is a process designed to provide reasonable, but not absolute, assurance
regarding the reliability of financial reporting and of the preparation of financial statements for external purposes in accordance
with IFRS. The President and Chief Executive Officer (“CEO”) and the Chief Financial Officer (“CFO”), together with
Management, are responsible for establishing and maintaining adequate disclosure controls and procedures ("DC&P") and
ICFR, as defined in National Instrument 52-109. The Corporation’s internal control framework is based on the criteria published
in the updated version released in May 2013 of the report Internal Control Integrated Framework issued by the Committee of
Sponsoring Organizations of the Treadway Commission (“2013 COSO Framework”).
The DC&P have been designed to provide reasonable assurance that material information relating to the Corporation is made
known to the CEO and CFO by others, and that information required to be disclosed by the Corporation in its annual filings,
interim filings or other reports filed or submitted by the Corporation under securities legislation is recorded, processed,
summarized and reported within the time periods specified in securities legislation.
As at March 31, 2023, an evaluation was carried out, under the supervision of the CEO and the CFO, of the design and
operating effectiveness of the Corporation’s DC&P. Based on this evaluation, the CEO and the CFO concluded that the
Corporation’s DC&P were appropriately designed and were operating effectively as at March 31, 2023.
As at March 31, 2023, an evaluation was carried out, under the supervision of the CEO and the CFO, of the effectiveness of
the ICFR based on the 2013 COSO Framework. Based on this evaluation, they have concluded that the Corporation’s ICFR
were effective as at March 31, 2023.
There have been no changes in the Corporation’s internal control over financial reporting that occurred during the period that
have materially affected, or are likely to materially affect, the Corporation’s ICFR.
Management’s assessment of and conclusion on the design and the effectiveness of the Corporation’s ICFR as at June 6,
2023, did not include the controls or procedures of the operations of Ultimate Trivia by Stingray. The Corporation has
accordingly availed itself of provision 3.3(1)(b) of Regulation 52-109 which permits exclusion of this acquisition in the design
and operating effectiveness assessment of its ICFR for a maximum period of 365 days from the date of acquisition.
Subsequent Events
There are no subsequent events.
Additional Information
Additional information about the Corporation is available on our website at www.stingray.com and on the SEDAR website at
www.sedar.com
Annual Report 2023 | Stingray Group Inc. | 52
KPMG LLP
600 de Maisonneuve Blvd. West
Suite 1500, Tour KPMG
Montréal (Québec) H3A 0A3
Canada
Telephone
Fax
Internet
(514) 840-2100
(514) 840-2187
www.kpmg.ca
INDEPENDENT AUDITOR’S REPORT
To the Shareholders of Stingray Group Inc.
Opinion
We have audited the consolidated financial statements of Stingray Group Inc. (the "Entity"), which
comprise:
•
•
•
•
the consolidated statements of financial position as at March 31, 2023 and March 31, 2022
the consolidated statements of comprehensive income for the years then ended
the consolidated statements of changes in equity for the years then ended
the consolidated statements of cash flows for the years then ended
• and notes to the consolidated financial statements, including a summary of significant accounting
policies
(Hereinafter referred to as the "financial statements").
In our opinion, the accompanying financial statements present fairly, in all material respects,
the consolidated financial position of the Entity as at March 31, 2023 and March 31, 2022, and its
consolidated financial performance and its consolidated cash flows for the years then ended in
accordance with International Financial Reporting Standards ("IFRS").
Basis for Opinion
We conducted our audit in accordance with Canadian generally accepted auditing standards.
Our responsibilities under those standards are further described in the "Auditor’s Responsibilities
for the Audit of the Financial Statements" section of our auditor’s report.
We are independent of the Entity in accordance with the ethical requirements that are relevant to our
audit of the financial statements in Canada and we have fulfilled our other responsibilities in
accordance with these requirements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
KPMG LLP, an Ontario limited liability partnership and member firm of the KPMG global organization of independent
member firms affiliated with KPMG International Limited, a private English company limited by guarantee. KPMG
Canada provides services to KPMG LLP.
Page 2
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance
in our audit of the financial statements for the year ended March 31, 2023. These matters were
addressed in the context of our audit of the financial statements as a whole, and in forming our
opinion thereon, and we do not provide a separate opinion on these matters. We have determined the
matter described below to be the key audit matter to be communicated in our auditor’s report.
Goodwill and broadcast licenses impairment assessments for certain cash
generating units
Description of the matter
We draw attention to Note 16 of the financial statements. The Entity’s goodwill and broadcast
licenses amount to $360,900 and $272,996, respectively. For the purpose of impairment testing,
broadcast licenses are allocated to groups of cash generating units ("CGUs"). Goodwill and
broadcast licenses are tested for impairment annually and when circumstances indicate the carrying
value may be impaired. The recoverable amounts of the CGUs have been determined based on their
value-in-use ("VIU") using a discounted cash flow model. A significant estimate used in determining
the recoverable amount is the measurement of the risk adjusted forecasted cash flows expected to be
generated. Significant estimates and assumptions used to determine the discounted cash flows
include the growth rate in revenue, operating expenses and discount rates.
Why the Matter is a Key Audit Matter
We identified goodwill and broadcast licenses impairment assessment for certain CGUs as a key
audit matter. This matter represented an area of significant risk of material misstatement for certain
groups of CGUs. This is due to the magnitude of the goodwill and the high degree of estimation
uncertainty in determining the recoverable amount. In addition, significant auditor judgment and
specialized skills and knowledge were needed in evaluating the results of our procedures due to the
sensitivity to the Entity’s determination of the recoverable amounts of the certain CGUs to minor
changes in significant assumptions.
How the Matter Was Addressed in the Audit
The following are the primary procedures we performed to address this key audit matter:
• We compared the Entity’s revenue growth rate assumptions for certain groups of CGUs to the
expected growth rates included in analyst reports of the Entity and comparable entities and took
into account conditions and events considered by the entity in arriving at projected sales of the
groups of CGUs.
• We compared certain groups of CGUs’ future cash flows to historical actual results. We evaluated
the Entity’s ability to accurately forecast future cash flows by comparing actual results to historical
cash flow forecasts.
• We involved valuation professionals with specialized skills and knowledge. They assisted us in
evaluating the reasonableness of the discount rate assumptions used by management in the
determination of the VIU by comparing them to discount rate ranges that were independently
developed using publicly available market data for comparable entities.
Page 3
Other Information
Management is responsible for the other information. Other information comprises:
• The information included in Management’s Discussion and Analysis filed with the relevant
Canadian Securities Commissions.
• The information, other than the financial statements and the auditor’s report thereon, included in
a document likely to be entitled "Annual Report".
Our opinion on the financial statements does not cover the other information and we do not and will
not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other
information identified above and, in doing so, consider whether the other information is materially
inconsistent with the financial statements or our knowledge obtained in the audit and remain alert for
indications that the other information appears to be materially misstated.
We obtained the information included in Management’s Discussion and Analysis, and the Annual
Report filed with the relevant Canadian Securities Commissions as at the date of this auditor’s report.
If, based on the work we have performed on this other information, we conclude that there is a
material misstatement of this other information, we are required to report that fact in the auditor’s
report.
We have nothing to report in this regard.
Responsibilities of Management and Those Charged with Governance for the
Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements in
accordance with IFRS, and for such internal control as management determines is necessary to
enable the preparation of financial statements that are free from material misstatement, whether due
to fraud or error.
In preparing the financial statements, management is responsible for assessing the Entity’s ability to
continue as a going concern, disclosing as applicable, matters related to going concern and using
the going concern basis of accounting unless management either intends to liquidate the Entity or to
cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Entity’s financial reporting
process.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report
that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with Canadian generally accepted auditing standards will always detect a material
misstatement when it exists.
Page 4
Misstatements can arise from fraud or error and are considered material if, individually or in
the aggregate, they could reasonably be expected to influence the economic decisions of users taken
on the basis of the financial statements.
As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise
professional judgment and maintain professional skepticism throughout the audit.
We also:
•
Identify and assess the risks of material misstatement of the financial statements, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion.
The risk of not detecting a material misstatement resulting from fraud is higher than for one
resulting
intentional omissions,
misrepresentations, or the override of internal control.
involve collusion,
from error, as
fraud may
forgery,
• Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing
an opinion on the effectiveness of the Entity's internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
• Conclude on the appropriateness of management's use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to
events or conditions that may cast significant doubt on the Entity's ability to continue as a going
concern. If we conclude that a material uncertainty exists, we are required to draw attention in our
auditor’s report to the related disclosures in the financial statements or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up
to the date of our auditor’s report. However, future events or conditions may cause the Entity to
cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the financial statements, including
the disclosures, and whether the financial statements represent the underlying transactions and
events in a manner that achieves fair presentation.
• Communicate with those charged with governance regarding, among other matters, the planned
scope and timing of the audit and significant audit findings, including any significant deficiencies
in internal control that we identify during our audit.
• Provide those charged with governance with a statement that we have complied with relevant
ethical requirements regarding independence and communicate with them all relationships
and other matters that may reasonably be thought to bear on our independence, and where
applicable, related safeguards.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities
or business activities within the group Entity to express an opinion on the financial
statements. We are responsible for the direction, supervision and performance of the group
audit. We remain solely responsible for our audit opinion.
Page 5
• Determine, from the matters communicated with those charged with governance, those matters
that were of most significance in the audit of the financial statements of the current period and are
therefore the key audit matters. We describe these matters in our auditor’s report unless law or
regulation precludes public disclosure about the matter or when, in extremely rare circumstances,
we determine that a matter should not be communicated in our auditor’s report because the
adverse consequences of doing so would reasonably be expected to outweigh the public interest
benefits of such communication.
The engagement partner on the audit resulting in this auditor’s report is Marie David.
Montréal, Canada
June 6, 2023
*CPA auditor, public accountancy permit No. A131681
Consolidated Statements of Comprehensive Income
Years ended March 31, 2023 and 2022
(In thousands of Canadian dollars, except per share amounts)
Note
2023
2022
Revenues
Operating expenses
Depreciation, amortization and write-off
Net finance expense (income)
Change in fair value of investments
Acquisition, legal, restructuring and other expenses
Income before income taxes
Income taxes
Net income
Net income per share — Basic
Net income per share — Diluted
Weighted average number of shares — Basic
Weighted average number of shares — Diluted
Comprehensive income
Net income
Other comprehensive income (loss), net of tax
Items that may be reclassified to profit and loss
Exchange differences on translation of foreign operations
Items that will not be reclassified to profit and loss
Remeasurement gain (loss) on pension benefit obligations,
net of income tax payable of $0 (2022 — $1,004)
Total other comprehensive income
Total comprehensive income
Net income is entirely attributable to Shareholders.
5
6
8
17, 29
9
$
323,944
$
282,626
212,272
32,980
26,835
(289)
12,487
39,659
9,540
189,954
35,544
6,119
2
8,707
42,300
9,013
30,119
$
33,287
0.43
0.43
$
$
0.47
0.47
69,640,151
69,769,939
70,968,954
71,463,581
$
$
$
10
11
11
11
11
$
30,119
$
33,287
7,435
(1,954)
(52)
2,780
7,383
826
$
37,502
$
34,113
The accompanying notes are an integral part of these consolidated financial statements.
Annual Report 2023 | Stingray Group Inc. | 58
Consolidated Statements of Financial Position
March 31, 2023 and 2022
(In thousands of Canadian dollars)
Note
March 31,
2023
March 31,
2022
Recast (Note 3)
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Income taxes receivable
Inventories
Other current assets
Non-current assets
Property and equipment
Right-of-use assets on leases
Intangible assets, excluding broadcast licences
Broadcast licences
Goodwill
Investments
Other non-current assets
Deferred tax assets
Total assets
Liabilities and Equity
Current liabilities
Credit facilities
Accounts payable and accrued liabilities
Dividend payable
Deferred revenues
Current portion of lease liabilities
Current portion of other liabilities
Income taxes payable
Non-current liabilities
Credit facilities
Subordinated debt
Deferred revenues
Lease liabilities
Other liabilities
Deferred tax liabilities
Total liabilities
Shareholders’ equity
Share capital
Contributed surplus
Deficit
Accumulated other comprehensive income (loss)
Total equity
Commitments (note 27)
Total liabilities and equity
$
12
13
14
15
16
16
17
10
19
18
24
21
22
19
20
21
22
10
24
$
15,453
71,251
5,856
5,704
17,719
115,983
38,792
23,271
68,814
272,996
360,900
8,295
3,945
2,206
$
895,202
$
$
$
7,500
74,826
5,200
7,473
4,177
31,428
4,575
135,179
353,490
25,543
267
21,533
16,556
56,365
608,933
297,903
6,158
(21,734)
3,942
286,269
14,563
66,666
96
5,200
13,388
99,913
39,931
25,944
76,230
272,996
354,679
6,431
5,136
2,816
884,076
7,500
67,391
5,259
4,942
4,171
17,786
8,283
115,332
350,703
25,442
1,030
24,147
43,211
50,682
610,547
302,328
5,745
(31,103)
(3,441)
273,529
$
895,202
$
884,076
The accompanying notes are an integral part of these consolidated financial statements.
Approved by the Board of Directors,
(Signed) Eric Boyko, Director
(Signed) Karinne Bouchard, Director
Annual Report 2023 | Stingray Group Inc. | 59
Consolidated Statements of Changes in Equity
Years ended March 31, 2023 and 2022
(In thousands of Canadian
dollars, except number of share
capital)
Share Capital
Number
Amount
Contributed
surplus
Deficit
Accumulated other
comprehensive income (loss)
Cumulative
translation
account
Defined
benefit pension
plans
Total
shareholders’
equity
Balance at March 31, 2021
72,111,588
$ 313,951
$ 5,180
$
(40,172)
$
(3,775)
$
(492)
$ 274,692
Issuance of shares upon
exercise of stock options
(note 24)
Dividends
95,000
—
378
—
(84)
—
—
(21,104)
Repurchase and cancellation
of shares (note 24)
(2,106,000)
(11,970)
Share-based compensation
—
—
Employee share purchase
plan (notes 24 and 26)
Net income
Other comprehensive income
(loss)
(4,664)
(31)
—
—
—
—
—
618
31
—
—
(3,114)
—
—
33,287
—
—
—
—
—
—
—
—
—
—
—
—
294
(21,104)
(15,084)
618
—
33,287
—
(1,954)
2,780
826
Balance at March 31, 2022
70,095,924
$ 302,328
$ 5,745
$
(31,103)
$
(5,729)
$ 2,288
$ 273,529
Dividends
—
—
Repurchase and cancellation
of shares (note 24)
(786,100)
(4,466)
Share-based compensation
—
Employee share purchase
plan (notes 24 and 26)
Net income
Other comprehensive income
(loss)
9,974
—
—
—
41
—
—
—
—
454
(41)
—
—
(20,821)
71
—
—
30,119
—
Balance at March 31, 2023
69,319,798
297,903
6,158
(21,734)
—
—
—
—
—
—
—
—
—
—
(20,821)
(4,395)
454
—
30,119
7,435
1,706
(52)
7,383
2,236
286,269
The accompanying notes are an integral part of these consolidated financial statements.
Annual Report 2023 | Stingray Group Inc. | 60
Consolidated Statements of Cash Flows
Years ended March 31, 2023 and 2022
(In thousands of Canadian dollars)
Note
2023
2022
$
30,119
$
33,287
Operating activities:
Net income
Adjustments for:
Depreciation, amortization and write-off
Share-based compensation, PSU and DSU expenses
Interest expense and standby fees
Change in fair value of derivative financial instruments
Change in fair value of investments
Share of results of joint ventures
Share of results of investments in associates
Change in fair value of contingent consideration
Accretion of other liabilities
Interest expense on lease liabilities
Income tax expense
Income taxes paid
Net change in non-cash operating items
Financing activities:
Increase of credit facilities
Decrease of subordinated debt
Payment of dividends
Proceeds from the exercise of stock options
Shares repurchased and cancelled
Shares purchased under the employee share purchase plan
Interest paid
Repayment of lease liabilities
Repayment of other liabilities
Unwind of interest rate swaps
Investing activities:
Business acquisitions, net of cash acquired
Acquisition of investments
Acquisition of investments in associates
Acquisition of investments in joint ventures
Acquisition of property and equipment
Acquisition of intangible assets other than internally
developed intangible assets
Addition to internally developed intangible assets
Net increase in cash and cash equivalents
Cash and cash equivalents, beginning of year
8
8
17
17
17
8
8
8, 21
25
20
24
24
24
21
29
3
17
17
32,980
2,468
21,164
739
(289)
726
649
1,098
1,728
1,631
9,540
(8,122)
94,431
(7,482)
86,949
2,410
—
(20,880)
—
(4,396)
(324)
(23,892)
(4,433)
(13,939)
—
(65,454)
(3,887)
(158)
(513)
(589)
(8,234)
(1,281)
(5,943)
(20,605)
890
14,563
35,544
6,597
12,683
(3,397)
2
65
(241)
(7,555)
1,644
1,615
9,013
(5,570)
83,687
(24)
83,663
53,658
(6,400)
(21,254)
294
(15,084)
(430)
(14,384)
(4,815)
(50,495)
(600)
(59,510)
1,630
(703)
(2,508)
—
(9,061)
(1,134)
(6,854)
(18,630)
5,523
9,040
14,563
Cash and cash equivalents, end of year
$
15,453
$
The accompanying notes are an integral part of these consolidated financial statements.
Annual Report 2023 | Stingray Group Inc. | 61
Notes to Consolidated Financial Statements
Years ended March 31, 2023 and 2022
(In thousands of Canadian dollars, unless otherwise stated)
1. BUSINESS DESCRIPTION
Stingray Group Inc. (the “Corporation”) is incorporated under the Canada Business Corporations Act. The Corporation is
domiciled in Canada and its registered office is located at 730 Wellington, Montréal, Québec, H3C 1T4. The Corporation
is a provider of multi-platform music services. It broadcasts high quality music and video content on a number of platforms
including radio stations, premium television channels, digital TV, satellite TV, IPTV, the Internet, mobile devices and game
consoles. A portion of the Corporation’s revenues is derived from the sale of advertising airtime, which is subject to the
seasonal fluctuations of the Canadian radio industry. Accordingly, the first and third quarter results tend to be the strongest
and the second and fourth quarter results tend to be the weakest in a fiscal year.
2. SIGNIFICANT CHANGE AND HIGHLIGHT
The consolidated financial position and performance of the Corporation was particularly affected by the following event
and transactions during the year ended March 31, 2023:
On March 29, 2023, the Corporation signed an agreement to acquire the assets of Barvanna Inc. a company operating
a Free Ad-Supported Television (FAST) channel known as the “Ultimate Trivia Network” for total consideration of
US$1,397 ($1,891). It resulted in the recognition of intangible assets (note 15), goodwill (note 16), balance payable on
business acquisitions (note 22) and contingent consideration (note 22).
On September 23, 2022, the Corporation announced that the Toronto Stock Exchange had approved its normal course
issuer bid, authorizing the Corporation to repurchase up to an aggregate 2,868,124 subordinate voting shares and
variable subordinate voting shares (collectively, “Subordinate Shares”), representing approximately 10% of the public
float of Subordinate Shares as at September 13, 2022. Refer to note 24 for more information.
Annual Report 2023 | Stingray Group Inc. | 62
Notes to Consolidated Financial Statements
Years ended March 31, 2023 and 2022
(In thousands of Canadian dollars, unless otherwise stated)
3. BUSINESS ACQUISITIONS
FISCAL 2023
Ultimate Trivia Network
On March 29, 2023, the Corporation purchased all of the assets of Barvanna inc., a company operating a FAST channel
known as “The Ultimate Trivia Network” for total consideration of US$1,397 ($1,891). As a result of the acquisition, goodwill
of $1,145 was recognized related to the operating synergies expected to be achieved from integrating the acquired
business into the Corporation’s existing business. The goodwill will be deductible for tax purposes.
The contingent consideration arrangement requires the Corporation to pay, in cash, to the former owners, an amount not
exceeding US$3,000 ($4,058) over the next four years ending in March 2027, based on revenue target. The fair value of
the contingent consideration was determined using an income approach based on the estimated amount and timing of
projected cash flows. An amount of US$125 ($169) of the balance payable on acquisitions was subsequently paid on
April 11, 2023.
Assets acquired:
Intangible assets
Goodwill
Net assets acquired at fair value
Consideration given:
Balance payable on business acquisitions
Contingent consideration
Preliminary
746
1,145
1,891
$
1,891
648
1,243
1,891
$
As of the reporting date, the Corporation has not completed the purchase price allocation over the identifiable net assets
and goodwill as information to confirm the fair value of certain assets and liabilities remains to be obtained.
Annual Report 2023 | Stingray Group Inc. | 63
Notes to Consolidated Financial Statements
Years ended March 31, 2023 and 2022
(In thousands of Canadian dollars, unless otherwise stated)
FISCAL 2022
InStore Audio Network
On December 31, 2021, the Corporation purchased all of the membership interest of Pop Radio LLC, a company operating
InStore Audio Network, an in-store audio advertising network in the United States, for a total consideration of
US$47,788 ($60,586). As a result of the acquisition, goodwill of $18,942 was recognized related to the operating synergies
expected to be achieved from integrating the acquired business into the Corporation’s existing business. The goodwill will
be deductible for tax purposes.
The fair value of acquired trade receivables was US$5,629 ($7,136), which represented the gross contractual amount. The
contingent consideration arrangement requires the Corporation to pay, in cash, to the former owners, an amount not
exceeding US$14,000 ($18,946) over the next two years ending in April 2023, based on revenue target. The fair value of
the contingent consideration was determined using an income approach based on the estimated amount and timing of
projected cash flows. A portion of the balance payable on business acquisitions was paid on January 5, 2022 for an amount
of US$33,500 ($42,471). During the year ended March 31, 2023, the Corporation paid to the former owners a working
capital of $3,887.
The Corporation finalized the assessment of the fair values of the assets acquired and liabilities assumed related to this
acquisition and some adjustments to the preliminary assessment have been recorded in the consolidated statements of
financial position as shown below.
Assets acquired
Cash and cash equivalents
Trade and other receivables
Other current assets
Intangible assets
Goodwill
Other non-current assets
Liabilities assumed
Accounts payable and accrued liabilities
Deferred revenues
Net assets acquired at fair value
Consideration given
Balance payable on business acquisition
Contingent consideration
Working capital payable
$
$
$
$
Preliminary as of
March 31, 2022 Adjustments
1,307 $
7,136
984
34,233
18,567
2,853
65,080
3,788
706
4,494
$
—
—
—
—
375
—
375
375
—
375
Final
1,307
7,136
984
34,233
18,942
2,853
65,455
4,163
706
4,869
60,586 $
—
$
60,586
45,025 $
11,895
3,666
60,586 $
—
—
—
—
$
45,025
11,895
3,666
$
60,586
Annual Report 2023 | Stingray Group Inc. | 64
Notes to Consolidated Financial Statements
Years ended March 31, 2023 and 2022
(In thousands of Canadian dollars, unless otherwise stated)
Calm Radio Corp.
On June 30, 2021, the Corporation purchased all of the outstanding shares of Calm Radio, an online music streaming
service focused on the wellness and relaxation markets, for a total consideration of $8,171. As a result of the acquisition,
goodwill of $198 was recognized related to the operating synergies expected to be achieved from integrating the acquired
business into the Corporation’s existing business. The goodwill will not be deductible for tax purposes.
Assets acquired:
Cash and cash equivalents
Trade and other receivables
Other current assets
Property and equipment
Intangible assets
Goodwill
Deferred tax assets
Liabilities assumed:
Accounts payable and accrued liabilities
Deferred revenues
Deferred tax liabilities
Net assets acquired at fair value
Consideration given:
Balance payable on business acquisition
Contingent consideration
Working capital payable
Final
323
159
121
56
12,081
198
—
12,938
221
1,640
2,906
4,767
8,171
4,000
3,912
259
8,171
$
$
$
$
Annual Report 2023 | Stingray Group Inc. | 65
Notes to Consolidated Financial Statements
Years ended March 31, 2023 and 2022
(In thousands of Canadian dollars, unless otherwise stated)
4. SEGMENT INFORMATION
OPERATING SEGMENTS
The Corporation’s operating segments are aggregated in two segments: Broadcasting and commercial music and Radio.
The operating segments reflect how the Corporation manages its operations, resources and assets and how it measures
its performance. Both operating segments’ financial results are reviewed by the Chief operating decision maker (“CDOM”)
to make decisions about resources to be allocated to the segment and assesses its performance based on adjusted
earnings before interest, taxes, depreciation and amortization (thereafter “Adjusted EBITDA”), and for which distinct
financial information is available. Adjusted EBITDA excludes from income before income taxes the following expenses:
share-based compensation, performance and deferred share unit expense, depreciation, amortization and write-off, net
finance expense (income), change in fair value of investments and acquisition, legal, restructuring and other expenses.
There are no inter-segment revenues for the periods.
The Broadcasting and commercial music segment specializes in the broadcast of music and videos on multiple platforms
and digital signage experiences and generates revenues from subscriptions or contracts.
The Radio segment operates several radio stations across Canada and generates revenues from advertising.
Corporate and eliminations is a non-operating segment comprising corporate and administrative functions that provide
support and governance to the Corporation’s operating business units.
The following tables present financial information by segment for the years ended March 31, 2023 and 2022.
Year ended
Revenues
Operating expenses
(excluding share-based
compensation and PSU
and DSU expenses)
Adjusted EBITDA
Share-based compensation
PSU and DSU expenses
Depreciation, amortization
and write-off
Net finance expense
(income)
Change in fair value of
investments
Acquisition, legal,
restructuring and other
expenses
Income before income
taxes
Income taxes
Net income
Broadcasting and
commercial music
2022
2023
Radio
Corporate and
eliminations
2023
2022
2023
2022
Consolidated
2023
2022
$ 195,234 $ 159,082 $ 128,710 $ 123,544 $
— $
— $ 323,944 $ 282,626
118,514
77,309
$ 76,720 $ 58,315 $ 42,906 $ 46,235
100,767
85,804
5,486
(5,486)
5,281 209,804 183,357
(5,281) 114,140 99,269
611
1,857
798
5,799
611
1,857
798
5,799
32,980
35,544
32,980 35,544
26,835
6,119
26,835
6,119
(289)
2
(289)
2
$ 12,487 $
8,707
12,487
8,707
39,659 42,300
9,540
9,013
$
9,540
9,013
30,119 $ 33,287
Annual Report 2023 | Stingray Group Inc. | 66
Notes to Consolidated Financial Statements
Years ended March 31, 2023 and 2022
(In thousands of Canadian dollars, unless otherwise stated)
Broadcasting and
commercial music
March 31,
2022
Recast
(note 3)
March 31,
2023
Radio
Corporate and
eliminations
Consolidated
March 31,
2023
March 31,
2022
March 31,
2023
March 31,
2022
March 31,
2022
Recast
(note 3)
— $ 895,202 $ 884,076
March 31,
2023
Total assets
Total liabilities(1)
$ 282,499 $ 268,535 $ 612,703 $ 615,541 $
— $
$ 101,172 $
97,944 $ 113,825 $ 122,235 $ 393,936 $ 390,368 $ 608,933 $ 610,547
(1) Total liabilities include operating liabilities, the Credit facilities and the Subordinated debt
Year ended
Acquisition of property
and equipment
Addition to
right-of-use assets on
leases
Acquisition of intangible
assets
Acquisition of broadcast
licences
Goodwill recorded on
$
$
$
$
Broadcasting and
commercial music
2023
2022
Recast (note 3)
Radio
Consolidated
2023
2022
2023
2022
Recast (note 3)
4,143 $
4,617 $
4,181 $
4,066 $
8,324 $
8,683
2,026 $
685 $
525 $
2,434 $
2,551 $
3,119
8,229 $
54,467 $
— $
— $
— $
— $
— $
— $
8,229 $
54,467
8 $
— $
8
— $
1,145 $
18,942
business acquisitions
$
1,145 $
18,942 $
Acquisition of property and equipment, right-of-use assets on leases, intangible assets, broadcast licences and goodwill,
includes those acquired through business acquisitions, whether they were paid or not, and none are related to the Corporate
segment.
As at March 31, 2023, approximately 76% (75% as at March 31, 2022) of the Corporation’s non-current assets are located in
Canada.
Annual Report 2023 | Stingray Group Inc. | 67
Notes to Consolidated Financial Statements
Years ended March 31, 2023 and 2022
(In thousands of Canadian dollars, unless otherwise stated)
5. REVENUES
DISAGGREGATION OF REVENUES
The following table presents the Corporation’s revenues disaggregated by reportable segment, primary geographical
market and product.
Reportable segments(3)
Year ended
2023
2022
2023
2022
2023
2022
Broadcasting and
commercial music
Radio
Total revenues
Geography
Canada
United States
Other countries
Products
Subscriptions (1)
Equipment and labor (2)
Advertising (2)
$
58,322
85,992
50,920
195,234
136,615
18,192
40,427
$ 195,234
54,195 $
52,403
52,484
159,082
134,257
12,863
11,962
159,082 $
128,710
—
—
128,710
—
—
128,710
128,710
123,544 $
—
—
123,544
—
—
123,544
123,544 $
187,032
85,992
50,920
323,944
136,615
18,192
169,137
323,944
177,739
52,403
52,484
282,626
134,257
12,863
135,506
282,626
(1) Generally recognized over time
(2) Generally recognized at a point in time
(3) No revenues are generated from the Corporate Segment
UNSATISFIED PORTION OF PERFORMANCE OBLIGATIONS
The following table presents the revenues expected to be recognized over the next three years and thereafter related to
unsatisfied or partially satisfied performance obligations as at March 31, 2023. The table below excludes i) contracts with
a duration of one year or less and ii) variable consideration, such as revenues based on a number of subscribers or location
as they will likely vary throughout the term of the contracts.
2024
2025
2026 Thereafter
Equipment and labor
Subscriptions
$
$
5,066
15,765
20,831
—
8,985
8,985
—
3,971
3,971
—
2,173
2,173
$
$
Total
5,066
30,894
35,960
Annual Report 2023 | Stingray Group Inc. | 68
Notes to Consolidated Financial Statements
Years ended March 31, 2023 and 2022
(In thousands of Canadian dollars, unless otherwise stated)
6. OPERATING EXPENSES
During the year ended March 31, 2022, the Corporation recognized, as a reduction of operating expenses, the subsidies
claimed under the CEWS and other programs amounting to $5,437. There were no CEWS recognized during the year
ended March 31, 2023.The Corporation also received tax credits related to its research and development and multimedia
activities, which amounted $1,980 (2022 – $1,606) and was recorded as a reduction of operating expenses for an amount
of $1,140 (2022 - $799) and as a reduction of intangible assets for an amount of $840 (2022 - $807).
7. OTHER INFORMATION
Expenses by nature are as follows:
Salaries and other short-term employee benefits
Research and development
Equipment costs
Share-based compensation
PSU and DSU expenses
8. NET FINANCE EXPENSE (INCOME)
Interest expense and standby fees
Change in fair value of derivative financial instruments
Change in fair value of contingent consideration
Accretion of other liabilities
Interest expense on lease liabilities (note 21)
Foreign exchange loss
$
$
$
$
$
$
$
9. ACQUISITION, LEGAL, RESTRUCTURING AND OTHER EXPENSES
Acquisition
Legal
Restructuring and other
$
$
2023
95,737
10,193
10,530
611
1,857
2023
21,164
739
1,098
1,728
1,631
475
26,835
2023
184
3,673
8,630
12,487
2022
96,566
11,149
6,869
798
5,799
2022
12,683
(3,397)
(7,555)
1,644
1,615
1,129
6,119
2022
282
2,505
5,920
8,707
$
$
$
$
$
$
$
$
$
Annual Report 2023 | Stingray Group Inc. | 69
Notes to Consolidated Financial Statements
Years ended March 31, 2023 and 2022
(In thousands of Canadian dollars, unless otherwise stated)
10. INCOME TAXES
The income tax expense consists of the following:
Current income tax:
Current year
Adjustment for prior years
Deferred income tax:
Origination and reversal of temporary differences
Change in substantively enacted tax rate
Adjustment for prior years
Total income tax expense
2023
2,810
478
3,288
6,835
22
(605)
6,252
9,540
$
$
2022
10,308
(129)
10,179
(733)
(164)
(269)
(1,166)
9,013
$
$
The following table reconciles income tax computed at the Canadian statutory rate of 26.5% (2022 — 26.5%) and the total
income tax expense for the years ended March 31.
2023
2022
Income before income taxes
$
39,659
$
42,300
Income tax at the combined Canadian statutory rate
(Decrease) increase resulting from:
Impact of foreign tax rate differences
Income taxes on non-deductible expenses and
non-taxable revenues
Change in recognized tax losses and deductible temporary
differences
Change in substantively enacted tax rate
Other
Total income tax expense
SIGNIFICANT ESTIMATE
10,510
(853)
(761)
159
22
463
9,540
$
11,210
(860)
(1,547)
266
(164)
108
9,013
$
Recorded income taxes and tax credits are subject to review and approval by tax authorities and therefore, final amounts
could be different from the amounts recorded.
Annual Report 2023 | Stingray Group Inc. | 70
Notes to Consolidated Financial Statements
Years ended March 31, 2023 and 2022
(In thousands of Canadian dollars, unless otherwise stated)
RECOGNIZED DEFERRED TAX ASSETS AND LIABILITIES
The tax effects of significant components of temporary differences that give rise to deferred tax assets and liabilities are
as follows:
Property and equipment
Intangible assets, goodwill and
broadcast licences
Financing fees
Tax losses and Scientific Research and
Experimental Development
Expenditures (“SR&ED”) carried
forward
Investments
CRTC tangible benefits
PSU and DSU expenses
Balance payable on business
acquisition
Right-of-use assets on leases
Lease liabilities
Accrued pension benefit liability
Other
Deferred tax assets and liabilities
Offsetting of assets and liabilities
Net deferred tax assets and liabilities
2023
2022
Assets
Liabilities
Assets
Liabilities
$
1,950 $
3,952
$
2,067 $
3,261
1,986
46
66,007
—
839
514
66,879
—
3,431
—
3,907
3,425
—
—
6,837
982
—
22,564
(20,358)
$
2,206 $
—
444
—
—
25
6,217
—
—
78
76,723
(20,358)
56,365
6,105
—
7,479
3,213
—
—
7,485
1,457
25
29,184
(26,368)
$
2,816 $
—
66
—
—
—
6,844
—
—
—
77,050
(26,368)
50,682
Changes in deferred tax assets and liabilities for the year ended March 31, 2023 are as follow:
Property and equipment
Intangible assets, goodwill
and broadcast licences
Financing fees
Tax losses and SR&ED
carried forward
Investments
CRTC tangible benefits
Balance payable on business
acquisition
PSU and DSU expenses
Right-of-use assets on leases
Lease liabilities
Accrued pension benefit
liability
Other
Balance
as at March
31, 2022
(1,193)
$
Recognized
in net income
(809)
Recognized in
other
comprehensive
income (loss)
—
Exchange
rate
change
—
Balance
as at March
31, 2023
(2,002)
(66,040)
514
6,103
(65)
7,479
—
3,213
(6,844)
7,485
1,457
25
(47,866)
2,064
(468)
(2,676)
(379)
(3,572)
(25)
212
627
(648)
(475)
(103)
(6,252)
$
—
—
—
—
—
—
—
—
—
—
—
—
(45)
—
(64,021)
46
4
—
—
—
—
—
—
3,431
(444)
3,907
(25)
3,425
(6,217)
6,837
—
—
(41)
982
(78)
(54,159)
Annual Report 2023 | Stingray Group Inc. | 71
Notes to Consolidated Financial Statements
Years ended March 31, 2023 and 2022
(In thousands of Canadian dollars, unless otherwise stated)
Changes in deferred tax assets and liabilities for the year ended March 31, 2022 are as follow:
Property and equipment
Intangible assets, goodwill
and broadcast licences
Financing fees
Tax losses and SR&ED
carried forward
Investments
CRTC tangible benefits
PSU and DSU expenses
Right-of-use assets on leases
Lease liabilities
Accrued pension benefit
liability
Other
Balance
as at March
31, 2021
(1,103)
$
Recognized
in net income
(90)
Recognized in
other
comprehensive
income (loss)
—
Exchange
rate
change
—
Business
acquisitions
—
Balance
as at March
31, 2022
(1,193)
(64,200)
980
7,670
—
7,390
2,596
(4,844)
5,270
1,941
(759)
(45,059)
1,371
(466)
(1,809)
(65)
89
617
(2,000)
2,215
520
784
1,166
$
—
—
—
—
—
—
—
—
(1,004)
—
(1,004)
(70)
—
(3,141)
—
(66,040)
514
8
—
—
—
—
—
—
—
(62)
234
—
—
—
—
—
6,103
(65)
7,479
3,213
(6,844)
7,485
—
—
(2,907)
1,457
25
(47,866)
UNRECOGNIZED DEFERRED TAX ASSETS
The Corporation has operating tax losses carried forward of $16,579 (2022 – $30,331) that are available to reduce future
taxable income. A tax benefit was not recognized for $5,003 (2022 – $9,297) of these tax losses carried forward. Deferred
tax assets have not been recognized in respect of these items because it is not probable that future taxable profit will be
available against which the Corporation can utilize the benefits therefrom.
As at March 31, 2023 and 2022, the amounts and expiry dates of the tax losses carried forward were as follows:
Canada (1)
Netherlands
Belgium
Switzerland
2023
2028
2032
2037
2038
2039
2040
2041
2042
2043
Indefinite
$
—
$
—
219
2,522
46
1,537
837
17
46
—
5,224
$
$
—
—
—
—
—
—
—
—
—
2,134
2,134
$
$
—
—
—
—
—
—
—
—
—
815
815
$
$
337
341
—
—
—
—
—
—
—
—
678
$
$
United
Kingdom
—
—
—
—
—
—
—
—
—
7,728
7,728
(1) Represents tax losses carried forward as per federal jurisdiction and tax losses available as per provincial jurisdictions may differ.
Annual Report 2023 | Stingray Group Inc. | 72
Notes to Consolidated Financial Statements
Years ended March 31, 2023 and 2022
(In thousands of Canadian dollars, unless otherwise stated)
Canada (1)
Netherlands
Belgium
Switzerland
2022
2023 (2)
2028
2038
2039
2040
2041
Indefinite
$
$
$
—
—
2,474
232
1,334
837
—
4,877
$
—
—
—
—
—
—
2,106
2,106
$
$
—
—
—
—
—
—
2,990
2,990
$
$
2,064
789
—
—
—
—
—
2,853
$
$
United
Kingdom
—
—
—
—
—
—
17,505
17,505
(1) Represents tax losses carried forward as per federal jurisdiction and tax losses available as per provincial jurisdictions may differ.
(2)
These losses expired during the year ended March 31, 2023.
UNRECOGNIZED DEFERRED TAX LIABILITIES
The Corporation has not recognized a deferred tax liability for the undistributed earnings of its subsidiaries in the current
and prior years for those that the Corporation does not currently expect those undistributed earnings to reverse and
become taxable in the foreseeable future. A deferred income tax liability will be recognized when the Corporation expects
that it will recover those undistributed earnings in a taxable manner, such as the sale of the investment or through the
receipt of dividends.
11. EARNINGS PER SHARE
2023
2022
Net income
$
30,119
$
33,287
Basic weighted average number of subordinate voting shares,
variable subordinate voting shares and multiple voting shares
Dilutive effect of stock options
Diluted weighted average number of subordinated voting shares,
variable subordinated voting shares and multiple voting shares
Net income per share — Basic
Net income per share — Diluted
69,640,151
129,788
70,968,954
494,627
69,769,939
71,463,581
$
$
0.43
0.43
$
$
0.47
0.47
Annual Report 2023 | Stingray Group Inc. | 73
Notes to Consolidated Financial Statements
Years ended March 31, 2023 and 2022
(In thousands of Canadian dollars, unless otherwise stated)
12. TRADE AND OTHER RECEIVABLES
Trade
Other receivables
Settlement receivable
Sales taxes receivable
2023
61,133
2,176
2,748
5,194
71,251
$
$
2022
50,791
6,464
5,155
4,256
66,666
$
$
As at March 31, 2023 and 2022, the Corporation had research and development tax credits receivable of $1,811 and
$3,406, respectively, from the provincial and federal governments, which relate to qualified research and development
expenditures under the applicable tax laws. As at March 31, 2023 and 2022, the research and development tax credits
receivable of $1,811 and $3,406, respectively, were booked as a deduction of income tax payable. The amounts are subject
to a government tax audit and the final amounts received may differ from those recorded.
During the year ended March 31, 2021, the Corporation, together with its Canadian Broadcast Distribution Undertaking
customers (together, the “Objectors”), and SOCAN have entered into a binding memorandum of understanding that will
result in a partial refund to the Objectors of past royalties paid to Canadian collective societies. For the year ended
March 31, 2022, an amount of $5,155 was recognized in reduction of operating expenses. The Corporation received a
portion of the receivable after March 31, 2022. As at March 31, 2023, a balance of 2,748 is still receivable.
Annual Report 2023 | Stingray Group Inc. | 74
Notes to Consolidated Financial Statements
Years ended March 31, 2023 and 2022
(In thousands of Canadian dollars, unless otherwise stated)
13. PROPERTY AND EQUIPMENT
56
(2,024)
(46)
86,624
8,324
—
(1,883)
1,568
94,633
37,783
10,522
(1,477)
(135)
46,693
8,925
(999)
1,222
55,841
Land,
buildings and
leasehold
improvements
Broadcasting
infrastructure
Furniture,
fixtures and
equipment
Computer
hardware
Other
Total
$
15,939 $
275
18,731 $
24,416 $
3,204
3,786
18,609 $
1,094
$
2,316
268
80,011
8,627
17
(219)
—
(564)
6
16,018
220
—
21,371
2,020
—
(224)
—
(153)
29
(1,139)
(2)
27,090
3,271
—
(869)
10
(73)
(50)
19,590
2,197
—
(570)
21
—
1,144
403
—
(29)
—
2,555
616
—
(67)
—
Cost
Balance at March 31, 2021
Additions
Additions through business
acquisition
Disposals and write-off
Foreign exchange
differences
Balance at March 31, 2022
Additions
Additions through business
acquisition
Disposals and write-off
Foreign exchange
differences
Balance at March 31, 2023
$
16,035 $
23,238 $
30,636 $
21,620 $
3,104
$
$
Accumulated depreciation
Balance at March 31, 2021
Depreciation for the year
Disposals and write-off
Foreign exchange
differences
Balance at March 31, 2022
Depreciation for the year
Disposals and write-off
Foreign exchange
differences
5,429 $
1,044
(218)
2
6,257
916
(125)
5,760 $
2,706
(694)
13,015 $
4,521
(465)
—
7,772
2,005
(152)
(54)
17,017
3,271
(251)
12,885 $
2,130
(71)
(83)
14,861
2,339
(405)
26
—
965
231
$
694
121
(29)
—
786
394
(66)
—
Balance at March 31, 2023
$
7,074 $
9,625 $
21,002 $
17,026 $
1,114
$
Net carrying amounts
March 31, 2022
March 31, 2023
$
$
9,761 $
8,961 $
13,599 $
13,613 $
10,073 $
9,634 $
4,729 $
4,594 $
1,769
1,990
$
$
39,931
38,792
Annual Report 2023 | Stingray Group Inc. | 75
Notes to Consolidated Financial Statements
Years ended March 31, 2023 and 2022
(In thousands of Canadian dollars, unless otherwise stated)
14. RIGHT-OF-USE ASSETS ON LEASES
Cost
Balance at March 31, 2021
Additions
Reassessment of leases’ term
Foreign exchange differences
Balance at March 31, 2022
Additions
Reassessment of leases’ term
Foreign exchange differences
Balance at March 31, 2023
Accumulated depreciation
Balance at March 31, 2021
Depreciation for the year
Reassessment of leases’ term
Foreign exchange differences
Balance at March 31, 2022
Depreciation for the year
Reassessment of leases’ term
Foreign exchange differences
Balance at March 31, 2023
Net carrying amounts
March 31, 2022
March 31, 2023
Land and
buildings
Vehicles
Total
$
$
$
$
$
$
38,487
2,823
(2,211)
(84)
39,015
2,431
(1,170)
91
40,367
10,535
4,806
(1,970)
(43)
13,328
4,367
(459)
37
17,273
25,687
23,094
$
$
$
$
$
$
908
296
—
(15)
1,189
120
(39)
15
1,285
676
270
—
(14)
932
178
(17)
15
1,108
257
177
$
$
$
$
$
$
39,395
3,119
(2,211)
(99)
40,204
2,551
(1,209)
106
41,652
11,211
5,076
(1,970)
(57)
14,260
4,545
(476)
52
18,381
25,944
23,271
Annual Report 2023 | Stingray Group Inc. | 76
Notes to Consolidated Financial Statements
Years ended March 31, 2023 and 2022
(In thousands of Canadian dollars, unless otherwise stated)
15. INTANGIBLE ASSETS, EXCLUDING BROADCAST LICENCES
Internally
developed
software
and apps
Music
catalog
Client list
and
relationships Trademarks
Licences,
website
application
and
computer
software
Non-
compete
agreements
Total
$
20,396 $
10,066 $
110,841 $
10,482 $
24,908
$
18,099 $
194,792
6,854
1,639
618
—
—
—
681
31,156
3,767
9,488
—
264
8,153
46,314
366
29,255
(21)
10,663
(1,710)
140,287
(177)
14,072
(247)
34,830
(110)
18,253
(1,899)
247,360
5,943
552
—
(335)
90
31
—
—
4,291
—
192
401
988
173
249
—
291
204
7,483
746
4,841
$
34,863 $
11,336 $
144,578 $
14,665 $
36,240
$
18,748 $
260,430
$
9,259 $
6,512
6,394 $
988
96,580 $
6,394
6,061 $
1,234
19,197
2,869
$
15,417 $
1,402
152,908
19,399
259
16,030
5,850
(12)
7,370
984
(1,123)
101,851
7,046
(98)
(144)
(59)
(1,177)
7,197
1,532
21,922
2,967
16,760
358
171,130
18,737
(355)
27
1,545
204
206
122
1,749
Cost
Balance at March 31, 2021
Additions, net of tax credit of
$807
Additions through
business acquisition
Foreign exchange
differences
Balance at March 31, 2022
Additions, net of tax credit of
$840
Additions through
business acquisition
Foreign exchange
differences
Balance at March 31, 2023
Accumulated depreciation
Balance at March 31, 2021
Amortization for the year
Foreign exchange
differences
Balance at March 31, 2022
Amortization for the year
Foreign exchange
differences
Balance at March 31, 2023
$
21,525 $
8,381 $
110,442 $
8,933 $
25,095
$
17,240 $
191,616
Net carrying amounts
March 31, 2022
March 31, 2023
$
$
13,225 $
13,338 $
3,293 $
2,955 $
38,436 $
34,136 $
6,875 $
5,732 $
12,908
11,145
$
$
1,493 $
1,508 $
76,230
68,814
Annual Report 2023 | Stingray Group Inc. | 77
Notes to Consolidated Financial Statements
Years ended March 31, 2023 and 2022
(In thousands of Canadian dollars, unless otherwise stated)
16. GOODWILL AND BROADCAST LICENCES
Balance at March 31, 2021
Additions through business acquisitions (note 3)
Additions
Foreign exchange differences
Balance at March 31, 2022
Additions through business acquisition (note 3)
Foreign exchange differences
Balance at March 31, 2023
ANNUAL IMPAIRMENT ASSESSMENTS
Goodwill
Recast (note 3)
Broadcast licences
$
$
337,897
19,140
—
(2,358)
354,679
1,145
5,076
360,900
272,988
—
8
—
272,996
—
—
272,996
$
$
Goodwill and broadcast licences are tested for impairment annually and when circumstances indicate the carrying value
may be impaired. The Corporation’s impairment test for goodwill and broadcast licences having indefinite useful lives was
based on the greater of value-in-use (“VIU”) and fair value less cost to sell (“FVLCS”) calculations determined by using a
discounted cash flow model. VIU and FVLCS of cash generating units (“CGUs”) are determined with significant
unobservable inputs and are considered level 3 within the fair value hierarchy.
CASH-GENERATING UNITS
For the purposes of assessing impairment, goodwill is allocated to those CGUs that are expected to benefit from synergies
of the related business combination and represent the lowest level within the Corporation at which management monitors
goodwill.
Broadcast licences are grouped at the CGU level, which is the lowest level for which there are largely independent cash
inflows. For broadcast licences impairment testing purposes, the Corporation has identified 14 CGUs, based on
geographical areas where interdependent cash inflows exist. Impairment charges and reversals, if any, are included as a
separate line on the consolidated statements of comprehensive income.
The carrying amounts of goodwill and broadcast licences allocated to each CGU and/or group of CGUs are set out in the
following tables.
Goodwill
Radio
Broadcast and commercial music
Broadcast licences
Toronto
Ottawa
Other(1)
2023
218,404
142,496
360,900
90,270
48,568
134,158
272,996
$
$
$
$
2022
Recast (Note 3)
$
$
$
$
218,404
136,275
354,679
90,270
48,568
134,158
272,996
(1) The carrying value of broadcast licences in each of the other CGUs is less than 10% of the total carrying value of broadcast licences.
Consequently, these other CGUs are grouped together for the purpose of note disclosure.
Annual Report 2023 | Stingray Group Inc. | 78
Notes to Consolidated Financial Statements
Years ended March 31, 2023 and 2022
(In thousands of Canadian dollars, unless otherwise stated)
RADIO LICENCES IMPAIRMENT ASSESSMENTS
The recoverable amounts of the CGUs have been determined based on their VIU. The recoverable values have been
determined to be higher than the carrying amounts. As a result, no impairment was recorded.
The VIUs were calculated using unobservable (Level 3) inputs such as cash flow projections from financial budgets
approved by the Board of Directors. Growth rates used over the budget period are based on management’s estimates of
performance, which is established by considering historical growth rates achieved as well as anticipated fluctuations
including those resulting from the current economic environment. The growth rates depend also on whether the CGU
includes mature market stations versus start-up or evolving stations. Management assesses how the CGU’s market
position, relative to its competitors, might change over the budget period. The key assumptions used in the estimation of
the recoverable amount for the CGUs are the risk adjusted forecasted cash flows. The most significant assumptions that
form part of the risk adjusted forecasted cash flows relate to estimated growth in revenues and operating expenses.
Forecasts are based on the Corporation’s estimate of future performance for this mature industry. Management expects
the Corporation’s share of the market to be stable over the long-term budget period, despite that changes in rating results
could affect local market shares and relating growth rates.
CGU
Toronto
Ottawa
Other(1)
Five-year average
growth rate in
revenues
4.5%
4.6%
4.0% to 5.3%
Five-year average
growth rate in
operating expenses
2.3%
1.8%
(3.5)% to 3.1%
Terminal value
1.5%
1.5%
1.5%
Pre-tax discount
rate
9.7%
9.7%
9.5% to 9.8%
(1) The carrying value of broadcast licences in each of the other CGUs is less than 10% of the total carrying value of broadcast licences.
Consequently, these other CGUs are grouped together for the purpose of note disclosure.
The pre-tax discount rates applied to cash flow projections were derived from the Corporation’s weighted average cost of
capital (“WACC”). The discount rate calculation is based on the specific circumstances of the Corporation and its CGUs
and is derived from its WACC. The WACC takes into account both debt and equity. The cost of equity is derived from the
expected return on investment by the Corporation’s investors. The cost of debt is based on the interest-bearing borrowings
the Corporation is obliged to service. CGU-specific risk is incorporated by applying individual beta factors. The beta factors
are evaluated annually based on publicly available market data.
The possibility of new market entrants can have an impact on growth rate assumptions, as can adverse ratings results,
which would impact market share. In fact, by their nature, the above significant estimates and assumptions are subject to
measurement uncertainty, and consequently, actual results could differ from estimates used.
Management has determined that the calculation of the VIUs is very sensitive to all above assumptions and therefore
management’s conclusions on impairment could be materially different if these assumptions changed.
The following changes in basis points would result in carrying value equal to recoverable amount for the year ended March
31, 2023, assuming that all other variables remained constant:
Radio
Five-year average
growth rate in
revenues
(215)
Five-year average
growth rate in
operating expenses
152
Terminal value
(110)
Pre-tax discount
rate
80
Annual Report 2023 | Stingray Group Inc. | 79
Notes to Consolidated Financial Statements
Years ended March 31, 2023 and 2022
(In thousands of Canadian dollars, unless otherwise stated)
GOODWILL IMPAIRMENT ASSESSMENTS
The recoverable amount of the CGUs has been determined based on its VIU. The recoverable amount has been
determined to be higher than the carrying amount. As a result, no impairment was recorded.
The VIU was calculated using unobservable (Level 3) inputs such as risk adjusted cash flows from financial budgets
approved by the Board of Directors covering a five-year period. The Corporation considered past experience, economic
trends as well as industry and market trends in assessing the level of cash flows that can be maintained in the future.
The most significant assumptions that form part of the risk adjusted forecasted cash flows relate to estimated growth in
revenues and operating expenses. Forecasts are based on the Corporation’s estimate of future performance for this mature
industry.
CGU
Broadcast and Commercial Music
Radio
Five-year average
growth rate in
revenues
4.0%
4.1%
Five-year average
growth rate in
operating expenses
1.0%
1.9%
Terminal value
Pre-tax discount
rate
2.5%
1.5%
9.7%
9.7%
The pre-tax discount rate represents the Corporation’s WACC as at the date of the assessment. Refer to the section above
for more information on discount rates calculation.
By their nature, these estimates and assumptions are subject to measurement uncertainty, and consequently, actual results
could differ from estimates used. However, for the Broadcast and Commercial Music CGU, it has been determined that
there is no reasonable change in assumptions that would cause the carrying amount to exceed the estimated recoverable
amount. For the Radio CGU, refer to the section above for more information on sensitivity analysis.
Annual Report 2023 | Stingray Group Inc. | 80
Notes to Consolidated Financial Statements
Years ended March 31, 2023 and 2022
(In thousands of Canadian dollars, unless otherwise stated)
17. INVESTMENTS
The table below provides a continuity of investments, investments in joint ventures and investments in associates:
Balance at March 31, 2021
Additions
Share of results of joint venture
Equity gains on associates
Change in fair value, including foreign
exchange differences
Balance at March 31, 2022
Additions
Share of results of joint ventures
Equity gains on associates
Change in fair value, including foreign
exchange differences
Balance at March 31, 2023
INVESTMENTS
Investments
Investments in
joint ventures
Investments
in associates
$
900 $
703
—
—
12
1,615
190
—
—
590 $
—
(65)
—
1,556 $
2,508
—
241
—
525
2,244
(726)
—
(14)
4,291
516
—
(649)
$
40
1,845 $
—
2,043 $
249
4,407 $
Total
3,046
3,211
(65)
241
(2)
6,431
2,950
(726)
(649)
289
8,295
The Corporation has equity instruments in private entities at fair value that are estimated using a market comparison
technique. The valuation model is based on market multiples derived from quoted price of companies comparable to the
investments and the expected EBITDA on the investments.
All equity instruments in private entities are classified as financial assets at fair value through profit and loss.
SIGNIFICANT ESTIMATE
The fair value of investments that are not traded in an active market is determined using valuation techniques. The
Corporation uses judgment to select a variety of methods and make assumptions that are mainly based on market
conditions existing at the end of each reporting year. For details on the key assumptions used and the impact of changes
to these assumptions see Note 29.
Annual Report 2023 | Stingray Group Inc. | 81
Notes to Consolidated Financial Statements
Years ended March 31, 2023 and 2022
(In thousands of Canadian dollars, unless otherwise stated)
18. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
Trade
Accrued liabilities
PSU and DSU payable
Salaries and other short-term employees benefit payable
Sales taxes payable
19. CREDIT FACILITIES
2023
16,039
36,980
12,306
3,423
6,078
74,826
$
$
2022
(Recast Note 3)
$
$
18,374
32,651
9,247
2,871
4,248
67,391
The credit facilities consist of a $375,000 revolving credit facility (“Revolving facility”) and a remaining $56,250 term loan
(“Term facility”), both maturing in October 2026.
The credit facilities may be drawn in Canadian dollars in the form of prime rate loan or banker’s acceptances, in US dollars
in the form of US base rate loans or LIBOR loans, in Euro in the form of LIBOR loans, in British Pound in the form of SONIA
loans and in Australian dollars in the form of BBSY loans.
The credit facilities bear interest at (a) the bank’s prime rate (6.70% and 2.70% as at March 31, 2023 and 2022,
respectively) or US base rate if denominated in US dollars (9.25% and 4.00% as at March 31, 2023 and 2022, respectively)
plus an applicable margin based on a financial covenant, or (b) the banker’s acceptance rate (5.07% and 0.73% as at
March 31, 2023 and 2022, respectively) plus an applicable margin based on a financial covenant, or (c) LIBOR (4.84% and
0.21% as at March 31, 2023 and 2022, respectively) plus an applicable margin based on a financial covenant, at the
Corporation’s option.
In addition, the Corporation incurs standby fees based on a financial covenant, on the unused portion of the credit facilities
(0.40% for the years ended March 31, 2023 and 2022). The credit facilities are secured by guarantees from subsidiaries
and first ranking lien on universality of all assets, tangible and intangible, present and future.
The tables below are a summary of the credit facilities:
March 31, 2023
Total available
Drawn
Letter of credit
Net available
Committed credit facilities
Revolving facility
Term facility
Total committed credit facilities
Less: unamortized deferred financing fees
Balance, end of year
$
$
375,000
56,250
431,250
Current portion
Non-current portion
$
$
$
$
$
$
305,604
56,250
361,854
(864)
360,990
7,500
353,490
750
—
750
$
$
68,646
—
68,646
Annual Report 2023 | Stingray Group Inc. | 82
Notes to Consolidated Financial Statements
Years ended March 31, 2023 and 2022
(In thousands of Canadian dollars, unless otherwise stated)
March 31, 2022
Total available
Drawn
Letter of credit
Net available
Committed credit facilities
Revolving facility
Term facilities
Total committed credit facilities
Less: unamortized deferred financing fees
Balance, end of year
$
$
375,000
63,750
438,750
Current portion
Non-current portion
$
$
$
$
$
$
295,586
63,750
359,336
(1,133)
358,203
7,500
350,703
750
—
750
$
$
78,664
—
78,664
As at March 31, 2023 and 2022, a letter of credit amounting to $750 reduced the availability on the Revolving facility.
The Corporation is required to make consecutive quarterly capital repayments of 2.50% of the initial drawdown amount of
the Term facility. The remaining capital balance will be payable on maturity date, on October 15, 2026.
2024
2025
2026
2027
Capital repayments of
the Term facility
7,500
$
7,500
7,500
33,750
56,250
$
As at March 31, 2023 and 2022, the Corporation was in compliance with all the requirements of its credit agreement.
20. SUBORDINATED DEBT
The subordinated debt has a nominal value of $50,000 and during the year ended March 31, 2023, maturity was extended
from October 26, 2023 to October 26, 2026. The loan is unsecured and bears interest based on a financial covenant (6.95%
as at March 31, 2023 and 6.65% as at March 31, 2022). During the year ended March 31, 2022, the Corporation made a
voluntary capital repayment under its prepayment option of $6,400. The remaining capital balance will be payable on
maturity date.
Unamortized deferred financing fees amounted to $57 as at March 31, 2023 (2022 – $158).
Annual Report 2023 | Stingray Group Inc. | 83
Notes to Consolidated Financial Statements
Years ended March 31, 2023 and 2022
(In thousands of Canadian dollars, unless otherwise stated)
21. LEASE LIABILITIES
The following table presents a summary of the activity related to the lease liabilities of the Corporation.
Lease liabilities, beginning of year
Additions
Payment of lease liabilities, including related interest
Reassessment of leases’ term
Disposal
Interest expense on lease liabilities (note 8)
Foreign exchange
Lease liabilities, end of year
Lease liabilities included in the consolidated
statements of financial position
Current portion
Non-current portion
2023
2022
$
$
$
$
$
28,318
2,537
(6,064)
(716)
(39)
1,631
43
25,710
March 31,
2023
4,177
21,533
25,710
$
$
$
$
$
30,212
3,119
(6,430)
(153)
—
1,615
(45)
28,318
March 31,
2022
4,171
24,147
28,318
The following table presents the maturity analysis of contractual undiscounted cashflows related to the lease liabilities of
the Corporation as of March 31, 2023.
Less than one year
One to five years
More than five years
Total undiscounted lease liabilities as at March 31, 2023
$
$
1,361
19,213
13,295
33,869
Annual Report 2023 | Stingray Group Inc. | 84
Notes to Consolidated Financial Statements
Years ended March 31, 2023 and 2022
(In thousands of Canadian dollars, unless otherwise stated)
22. OTHER LIABILITIES
CRTC tangible benefits
Contingent consideration
Balance payable on business acquisitions
Accrued pension benefit liability (note 23)
Derivative financial instruments (note 29)
Performance share units payable
Other
Current portion
$
2023
14,765
21,117
3,428
2,707
2,203
2,136
1,628
47,984
(31,428)
$
2022
28,240
19,204
2,559
2,837
1,464
5,046
1,647
60,997
(17,786)
$
16,556
$
43,211
SIGNIFICANT ESTIMATE — CONTINGENT CONSIDERATION
In the event that certain predetermined sales volumes, specific contract renewals and other conditions are achieved by
the acquired companies, additional consideration may be payable in the future.
The fair value of the contingent consideration of $21,117 was estimated by calculating the present value of the future
expected outflows. For details of the key assumptions used and the impact of changes to these assumptions, see Note 29.
The estimates are based on discount rates ranging from 15% to 47%. During the year ended March 31, 2023, the
Corporation reassessed certain contingent consideration, as the actual sales revenues expected to be achieved by the
acquired companies were either above or below the maximum threshold.
Annual Report 2023 | Stingray Group Inc. | 85
Notes to Consolidated Financial Statements
Years ended March 31, 2023 and 2022
(In thousands of Canadian dollars, unless otherwise stated)
23. EMPLOYEE BENEFIT PLANS
The Corporation maintains a defined contribution pension plan and defined benefit pension plans.
DEFINED CONTRIBUTION PENSION PLAN
The defined contribution pension plan covers the majority of the Corporation’s employees. The Corporation’s contributions
to the defined contribution pension plan are based on percentages of gross salaries and totaled $1,614 (2022 – $1,550).
DEFINED BENEFIT PENSION PLANS
The Corporation maintains a defined benefit pension plan (the “Basic Plan”) for a small group of the Corporation’s former
employees, which is not accepting new entrants at this time. The Basic Plan provides pension benefits based on the length
of service and the last five years of average earnings of each member.
The Basic Plan meets the definition of a designated plan under the Income Tax Act (Canada). The most recent funding
actuarial valuation for the Basic Plan was as of March 31, 2023.
In addition, the Corporation has two individual Supplementary Retirement Pension Arrangements (“SRPAs”), which each
provide pension benefits to a retired executive. These SRPAs provide benefits above the Income Tax Act (Canada) limit.
These plans are funded by the Corporation.
The Corporation measures its accrued benefit obligations and fair value of plan assets for accounting purposes as of
March 31 of each year. The obligations as at March 31, 2023 and the 2023 current service cost of the Plans are determined
based on membership data as at March 31, 2023.
Items related to the Corporation’s defined benefit pension plans are presented as follows in the consolidated financial
statements:
Consolidated statements of financial position
Accrued pension benefit liability, included in other liabilities (note 22)
Accrued pension benefit asset, included in other non-current assets
Net accrued pension liability
Consolidated statements of comprehensive income
Pension benefit expense, included in net finance expense (income)
Other comprehensive gains and accumulated other comprehensive losses
Actuarial (gains) losses recognized in other comprehensive income (loss)
Cumulative actuarial gains recognized in other comprehensive income (loss)
2023
2022
$
$
$
$
$
(2,707)
1,599
$
(1,108)
$
(2,837)
1,633
(1,204)
86
$
193
52
(3,148)
$
$
(3,784)
(3,200)
Annual Report 2023 | Stingray Group Inc. | 86
Notes to Consolidated Financial Statements
Years ended March 31, 2023 and 2022
(In thousands of Canadian dollars, unless otherwise stated)
The following summarizes the movements in the defined benefit pension plan balances:
Accrued benefit obligations
Balance, beginning of year
Interest cost
Benefits paid
Actuarial gains (losses):
Impact of changes in financial assumptions
Impact of changes in experience adjustments
Balance, end of year
Plan assets
Fair value, beginning of year
Interest income
Actuarial gains:
Return on plan assets, excluding interest income
Administrative expenses
Benefits paid
Fair value, end of year
Net accrued pension benefit asset (liability)
2023
2022
Basic Plan
SRPAs
Basic Plan
SRPAs
$
$
$
$
$
4,012
151
(272)
(246)
(36)
3,609
5,645
214
(339)
(40)
(272)
5,208
2,837 $
109
(234)
(119)
114
2,707 $
$
4,805
130
(318)
6,112
167
(785)
(450)
(155)
4,012
(271)
(2,386)
2,837
$
— $
—
—
—
—
— $
5,337
144
$
522
(40)
(318)
5,645
$
—
—
—
—
—
—
1,599
(2,707) $
1,633
$
(2,837)
The Corporation determined that there was no limit on the defined benefit asset (asset ceiling) because the Corporation
has unimpaired rights to the surplus in the Basic Plan and it has the right to take contribution holidays when available.
Employer contributions to the SRPAs are estimated to be $199 in 2024.
Pension benefit expense recognized in the consolidated statements of comprehensive income as net finance expenses
(income) is as follows:
Interest cost
Interest income on plan assets
Administrative expenses
Defined benefit plan expense
2023
2022
Basic Plan
151
$
(214)
40
(23) $
SRPAs
109
—
—
109
$
$
Basic Plan
130
(144)
40
26
$
$
SRPAs
167
—
—
167
$
$
Actuarial gains and losses recognized in other comprehensive income (loss) are as follows:
Basic Plan
2023
SRPAs
Total
Basic Plan
2022
SRPAs
Total
Cumulative actuarial losses (gains),
beginning of year
$
(1,336)
(1,864)
(3,200) $
(209) $
793 $
584
Recognized actuarial losses (gains)
during the year
57
(5)
52
(1,127)
(2,657)
(3,784)
Cumulative actuarial losses,
end of year
$
(1,279)
(1,869)
(3,148) $
(1,336) $
(1,864) $
(3,200)
Annual Report 2023 | Stingray Group Inc. | 87
Notes to Consolidated Financial Statements
Years ended March 31, 2023 and 2022
(In thousands of Canadian dollars, unless otherwise stated)
The principal actuarial assumptions were as follows:
Discount rate for the accrued net benefit obligation
Future pension increases
2023
Basic Plan
3.9%
2.3%
SRPAs
3.9%
0.7%
2022
Basic Plan
3.5%
1.7%
SRPAs
3.5%
0.3%
As at March 31, 2023 and based on an actuarial review, the net remeasurement gain, before income tax recovery, recorded
in other comprehensive income (loss) of $52 (2022 – $3,784) was primarily reflective of an increase in the estimated
discount rate for both plans and an actuarial loss on plan assets.
Plan assets for the Basic Plan consist of:
Equity funds
Fixed income funds
2023
73%
27%
100%
2022
73%
27%
100%
The pension plan has no direct investments in the Corporation nor any of its affiliates. Investments are diversified such that
the failure of any single investment would not have a material impact on the overall level of assets. The largest proportion
of assets is invested in equities, although there is a good portion also invested in bonds and other highly liquid assets. All
assets are invested in funds where the underlying securities have quoted market prices in an active market. The
Corporation believes that equities offer the best returns over the long-term with an acceptable level of risk.
Since the benefit payments are adjusted to the Consumer Price Index, the pension plan is exposed to inflation. It is also
exposed to interest rate risks and changes in life expectancy of pensioners. A large portion of the plan assets consist of
equity securities, which are exposed to equity market risk.
Changes in assumptions of all plans would have resulted in an increase (decrease) in the net defined benefit obligation as
presented below:
Discount rate — change of 0.5%
Future pension costs — change of 1.0%
Life expectancy — change by 1 year
Change in assumption
Increase Decrease
286
(276)
(251)
(266)
379
239
$
$
$
$
$
$
The sensitivity analysis above has been determined based on a method that extrapolates the impact on the net defined
benefit obligation as a result of reasonable changes in key assumptions occurring at the end of the reporting period.
The average duration of the defined benefit plan obligation at the end of the reporting period is 8.7 years.
24. SHARE CAPITAL
Authorized:
Unlimited number of subordinate voting shares, participating, without par value
Unlimited number of variable subordinate voting shares, participating, without par value
Unlimited number of multiple voting shares (10 votes per share), participating, without par value
Unlimited number of special shares, participating, without par value
Unlimited number of preferred shares issuable in one or more series, non-participating, without par value
Annual Report 2023 | Stingray Group Inc. | 88
Notes to Consolidated Financial Statements
Years ended March 31, 2023 and 2022
(In thousands of Canadian dollars, unless otherwise stated)
Issued and outstanding:
The movements in share capital were as follows:
Year ended March 31, 2022
Subordinate voting shares and variable subordinate voting shares
As at March 31, 2021
Exercise of stock options
Repurchased and cancelled
Purchased and held in trust through employee share purchase plan
As at March 31, 2022
Multiple voting shares
As at March 31, 2021 and 2022
Year ended March 31, 2023
Subordinate voting shares and variable subordinate voting shares
As at March 31, 2022
Repurchased and cancelled
Purchased and held in trust through employee share purchase plan
As at March 31, 2023
Multiple voting shares
As at March 31, 2022 and 2023
Number of
shares
Carrying
amount
54,170,090
95,000
(2,106,000)
(4,664)
52,154,426
17,941,498
70,095,924
52,154,426
(786,100)
9,974
51,378,300
17,941,498
69,319,798
$
$
$
$
$
$
$
$
295,725
378
(11,970)
(31)
284,102
18,226
302,328
284,102
(4,466)
41
279,677
18,226
297,903
To comply with the Broadcasting Act and the regulations and directions promulgated thereunder from time to time, which
permit non-Canadians (as defined in the Direction to the CRTC (Ineligibility of Non-Canadians) (SOR/97-192)) to own and
control, directly or indirectly, up to 20% of the voting shares and 20% of the votes of an operating licensee that is a
corporation, such as the Corporation, the Corporation has imposed restrictions respecting the issuance, transfer and, if
applicable, voting of the Corporation’s shares. Restrictions include limitations over foreign ownership of the issued and
outstanding voting shares.
Annual Report 2023 | Stingray Group Inc. | 89
Notes to Consolidated Financial Statements
Years ended March 31, 2023 and 2022
(In thousands of Canadian dollars, unless otherwise stated)
TRANSACTIONS FOR THE YEAR ENDED MARCH 31, 2023
During the period, no stock options were exercised and consequently, the Corporation issued 0 subordinate voting shares.
During the year ended March 31, 2023, the Corporation declared dividends of $0.075 per subordinate voting share,
variable subordinate voting share and multiple voting share totalling $20,821. An amount of $20,880 was paid during the
year. A dividend payable of $5,200 is accrued in the consolidated statement of financial position as at March 31, 2023 as
it will be payable on or around June 15, 2023.
Share repurchase program
On September 23, 2022, the Toronto Stock Exchange (the "TSX") approved the implementation of a share repurchase
program, which took effect on September 27, 2022. This program allows the Corporation to repurchase up to an aggregate
2,868,124 subordinate voting shares and variable subordinate voting shares (collectively, the "Subordinate Shares"),
representing approximately 10% of the Subordinate Shares issued and outstanding as at September 13, 2022. In
accordance with TSX requirements, the Corporation is entitled to purchase, on any trading day, up to a total of 9,404
Subordinate Shares, representing 25% of the net average daily trading volume of the Subordinate Shares. When making
such repurchases, the number of Subordinate Shares in circulation is reduced and the proportionate interest of all
remaining shareholders in the Corporation's share capital is increased on a pro rata basis. All shares repurchased under
the share repurchase program will be cancelled upon repurchase. The share repurchase period will end no later than
September 26, 2023.
The following table summarizes the Corporation's share repurchase activities during the years ended March 31, 2023 and
2022.
Subordinate voting shares repurchased for cancellation (unit)
Average price per share
Total repurchase cost
Repurchase resulting in a reduction of:
Share capital
Deficit (1)
2023
2022
786,100
5.5911
4,395
$
$
2,106,000
7.1622
15,084
4,466
$
(71) $
11,970
3,114
$
$
$
$
(1) The excess of net repurchase cost over the average book value of the Subordinate voting shares.
Annual Report 2023 | Stingray Group Inc. | 90
Notes to Consolidated Financial Statements
Years ended March 31, 2023 and 2022
(In thousands of Canadian dollars, unless otherwise stated)
TRANSACTIONS FOR THE YEAR ENDED MARCH 31, 2022
During the year ended March 31, 2022, 95,000 stock options were exercised and consequently, the Corporation issued
95,000 subordinate voting shares. The proceeds amounted to $294. An amount of $84 of contributed surplus related to
those stock options was transferred to the subordinate voting shares’ account balance.
Also during the year, the Corporation declared dividends of $0.075 per subordinate voting share, variable subordinate
voting share and multiple voting share totalling $21,104. An amount of $21,254 was paid during the year. A dividend
payable of $5,259 was accrued in the consolidated statement of financial position as at March 31, 2022 as it was paid on
June 15, 2022.
25. NET CHANGE IN NON CASH OPERATING ITEMS
Trade and other receivables
Inventories
Other current assets
Other non-current assets
Accounts payable and accrued liabilities
Deferred revenues
Income taxes payable
Other payables
2023
(4,873)
(542)
(4,417)
(499)
9,235
1,729
(4,181)
(3,934)
(7,482)
$
$
2022
2,031
(1,945)
1,255
(956)
2,104
(1,289)
(1,430)
206
(24)
$
$
The following table summarizes the Corporation's additions not affecting cash and cash equivalents activities during the
years ended March 31, 2023 and 2022.
Additions to property and equipment
Additions to intangible assets, excluding broadcast licences and
intangible assets acquired through business acquisitions
2023
90
259
349
$
$
2022
(434)
165
(269)
$
$
Annual Report 2023 | Stingray Group Inc. | 91
Notes to Consolidated Financial Statements
Years ended March 31, 2023 and 2022
(In thousands of Canadian dollars, unless otherwise stated)
26. SHARE-BASED COMPENSATION
STOCK OPTION PLAN
The Corporation has a stock option plan to attract and retain employees, directors, officers and consultants. The plan
provides for the granting of options to purchase subordinate voting shares. Under this plan, 10% of all multiple voting
shares, subordinate voting shares and variable subordinate voting shares issued and outstanding on a non-diluted basis
are reserved for issuance. The terms and conditions for acquiring and exercising options are set by the Board of Directors.
Unless otherwise determined by the Board of Directors, each option shall expire at the latest on the seventh anniversary
of the grant date. The total number of shares issued to a single person cannot exceed 10% of the Corporation’s total issued
and outstanding common shares on a fully diluted basis.
Under the stock option plan, 3,489,331 stock options were outstanding as at March 31, 2023 (3,469,807 as at
March 31, 2022). Outstanding options are subject to employee service vesting criteria which range from nil to four years
of service.
The following summarizes the changes in the plan’s position for the years ended March 31, 2023 and 2022:
Options outstanding, beginning of year
Granted
Exercised (note 24)
Forfeited
Options outstanding, end of year
2023
Number of
options
Weighted
average
exercise price
3,469,807 $
166,701
—
(147,177)
3,489,331
6.48
6.12
—
6.73
6.45
2022
Number of
options
Weighted
average
exercise price
3,163,253 $
434,204
(95,000)
(32,650)
3,469,807
6.30
6.97
3.09
5.18
6.48
6.97
Exercisable options, end of year
2,470,260 $
6.75
1,970,675 $
The following is a summary of the information on the outstanding stock options as at March 31, 2023 and 2022:
Exercise price
March 31, 2023
$ 4.63
5.60
6.12
6.13
6.25
6.92
7.00
7.03
7.27
7.62
7.69
7.92
8.61
$ 6.45
Outstanding
options
Weighted average
outstanding
contractual life
outstanding (years)
Number of options
outstanding
717,520
644,996
160,496
21,929
287,880
337,740
25,000
44,248
311,047
458,270
22,124
43,698
414,383
3,489,331
4.18
3.18
6.19
3.85
2.15
5.18
2.36
5.62
3.21
4.23
5.87
5.60
5.19
4.09
Exercisable
options
Number
328,760
483,747
—
16,447
287,880
84,435
25,000
11,062
311,047
458,270
5,531
43,698
414,383
2,470,260
Annual Report 2023 | Stingray Group Inc. | 92
Notes to Consolidated Financial Statements
Years ended March 31, 2023 and 2022
(In thousands of Canadian dollars, unless otherwise stated)
Exercise price
March 31, 2022
$ 4.63
5.60
6.13
6.25
6.92
7.00
7.03
7.27
7.62
7.69
7.92
8.61
9.00
$ 6.48
Outstanding
options
Weighted average
outstanding
contractual life
outstanding (years)
Number of options
outstanding
748,422
672,374
21,929
287,880
359,933
25,000
44,248
311,047
482,850
22,124
43,698
433,746
16,556
3,469,807
5.18
4.18
4.85
3.15
6.18
3.36
6.62
4.21
5.23
6.87
6.60
6.19
4.89
5.00
Exercisable
options
Number
142,106
336,187
10,965
287,880
—
25,000
—
311,047
482,850
—
32,774
325,310
16,556
1,970,675
The weighted average fair value of the stock options granted during the year ended March 31, 2023 was $1.27 per stock
option (2022 — $1.41). This fair value was estimated at the date on which the options were granted by using the
Black-Scholes option pricing model with the following assumptions:
Weighted average volatility
Weighted average risk-free interest rate
Weighted average expected life of options
Weighted average value of the subordinate voting share at grant date
Weighted average expected dividend rate
2023
2022
34%
3.15%
5 years
$6.12
4.90%
35%
0.86% - 1.82%
5 years
$6.92 - $7.69
3.90% - 4.34%
The weighted average volatility used is calculated based on the Corporation’s historical volatility.
Total share-based compensation costs recognized under this stock option plan amount to $454 for the year ended
March 31, 2023 (2022 — $635).
The weighted average share price at the date of exercise for share options exercised during the year ended March 31, 2022
was $6.98. No options were exercised during Fiscal 2023.
Annual Report 2023 | Stingray Group Inc. | 93
Notes to Consolidated Financial Statements
Years ended March 31, 2023 and 2022
(In thousands of Canadian dollars, unless otherwise stated)
EMPLOYEE SHARE PURCHASE PLAN
The Corporation has an employee share purchase plan (“ESPP”) to attract and retain employees. Under this plan, eligible
employees, including certain key management personnel, are permitted to contribute up to a maximum of 6% of their
eligible earnings to purchase the Corporation’s subordinate voting shares and variable subordinate voting shares. Subject
to certain conditions, the Corporation will match a percentage of the employee’s contributions up to a maximum of 2% of
the employee’s eligible earnings and the shares purchased with the Corporation’s contributions become vested on
January 31 of the following year. All contributions are used by the plan’s trustee to purchase subordinate voting shares
and variable subordinate voting shares in the open market, on behalf of employees.
The following summarizes the changes in the plan’s position for the years ended March 31, 2023 and 2022:
Unvested contributions, beginning of year
Contributions
Dividends credited
Vested
Unvested contributions, end of year
2023
Number of
units
11,776 $
51,374
9,172
(70,520)
1,802 $
Amount
145
324
50
(415)
104
2022
Number of
units
7,112 $
39,464
5,028
(39,828)
11,776 $
Amount
114
325
36
(330)
145
The weighted average fair value of the shares contributed during the year ended March 31, 2023 was $7.25
(2022 — $7.23).
Total share-based compensation costs recognized under the ESPP amount to $157 for the year ended March 31, 2023
(2022 — $163).
PERFORMANCE SHARE UNIT PLAN
The Corporation has a performance unit plan (“PSU”) that can be granted to directors, officers, executives and employees
as part of their long-term compensation package, which is expected to be settled in cash after a three-year vesting period.
The value of the payout is determined by multiplying the number of PSU vested at the payout date by the volume weighted
average price of the Corporation’s shares on the last five trading days immediately preceding the vesting date. The fair
value of the payout is determined at each reporting date based on the fair value of the Corporation’s shares at the reporting
date. The fair value is amortized over the vesting period, being three years.
During the year ended March 31, 2023, 470,766 PSU (2022 — 417,783) were granted at a range of $4.49 to $6.59
(2022 — $6.71 to $7.26) per unit to executives and employees and no outstanding PSU were vested. As at March 31, 2023,
the fair value per unit was $5.89 (2022 — $7.32) for a total amount of $7,313 (2022 — $7,208) and was presented in
accrued liabilities on the consolidated statements of financial position.
Annual Report 2023 | Stingray Group Inc. | 94
Notes to Consolidated Financial Statements
Years ended March 31, 2023 and 2022
(In thousands of Canadian dollars, unless otherwise stated)
The following summarizes the changes in the plan’s position for the years ended March 31, 2023 and 2022:
Balance, beginning of year
Granted
Expense and revision of estimates
Liabilities settled
Forfeited
Balance, end of year
Balance, vested
2023
Number of
units
1,472,787 $
470,766
—
(268,671)
(104,472)
1,570,410 $
—
Amount
7,209
—
2,579
(2,035)
(440)
7,313
—
2022
Number of
units
1,510,513 $
417,783
—
(448,061)
(7,448)
1,472,787 $
—
Amount
5,705
—
4,860
(3,342)
(15)
7,208
—
Total share-based compensation costs recognized under
the PSU plan amount
to $2,139
for
the year
ended March 31, 2023 (2022 — $4,825).
DEFERRED SHARE UNIT PLAN
The Corporation has a deferred share unit plan (“DSU”) that can be granted to directors, officers and employees as part
of their compensation package, which is expected to be settled in cash. The value of the payout is determined by
multiplying the number of DSU vested at the payout date by the fair value of the Corporation’s shares on the volume
weighted average price of the Corporation’s shares on the last three trading days immediately preceding the payout date.
The fair value of the payout is determined at each reporting date based on the fair value of the Corporation’s shares at the
reporting date. DSU are vested as soon as they are granted.
During the year ended March 31, 2023, 210,062 DSU (2022 — 266,535) were granted at a range of $4.39 to $6.20 per
unit to directors (2022 — $6.58 to $7.61) and 1,134,322 DSU were vested (2022 — 924,260). The total expense related to
DSU plans amounted to $282 in 2023 (2022 — $954). As at March 31, 2023, the fair value per unit ranged from $5.94 to
$5.96 (2022 — $7.26 to $7.43) for a total amount, including fringes, of $7,129 (2022 — $7,084) presented in accrued
liabilities on the consolidated statements of financial position.
The following summarizes the changes in the plan’s position for the years ended March 31, 2023 and 2022:
Balance, beginning of year
Granted
Settlement
Revision of estimates
Balance, end of year
Balance, vested
2023
Number of
units
924,260 $
210,062
—
—
1,134,322 $
1,134,322 $
Amount
7,084
1,186
—
(1,141)
7,129
7,129
2022
Number of
units
672,827 $
266,535
(15,102)
—
924,260 $
924,260 $
Amount
5,063
1,859
(91)
253
7,084
7,084
Annual Report 2023 | Stingray Group Inc. | 95
Notes to Consolidated Financial Statements
Years ended March 31, 2023 and 2022
(In thousands of Canadian dollars, unless otherwise stated)
27. COMMITMENTS
The following table is a summary of the Corporation’s operating obligations as at March 31, 2023 that are due in each of
the next six years and thereafter.
2024
2025
2026
2027
2028
2029 and thereafter
OPERATING OBLIGATIONS
Operating
obligations
$
$
2,961
796
508
508
495
1,617
6,885
The Corporation’s significant operating obligations are for licensing and other long-term contracts that do not meet the
definition of a lease under IFRS 16. The Corporation must also pay royalties for the use of music for the majority of its
music services. Through copyright collective societies, the Corporation pays royalties to two sets of rights holders: rights
holders in music works, which are the music and the lyrics; and, rights holders in artists’ performances and sounds
recordings, which are the actual performances and recordings of the musical works.
BROADCAST LICENCES
A condition of the broadcast licences owned by the Corporation is to commit to fund Canadian Content Development
(“CCD”) over the initial term of the licences, which is usually seven years.
Annual Report 2023 | Stingray Group Inc. | 96
Notes to Consolidated Financial Statements
Years ended March 31, 2023 and 2022
(In thousands of Canadian dollars, unless otherwise stated)
28. USE OF ESTIMATES AND JUDGMENTS
The preparation of these consolidated financial statements in conformity with International Financial Reporting Standards
(“IFRS”) requires management to make judgments, estimates and assumptions that affect the application of accounting
policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these
estimates.
This note provides an overview of the areas that involved a higher degree of judgment or complexity, and of items which
are more likely to be materially adjusted due to estimates and assumptions differing from actual outcomes. Detailed
information about each of these estimates and judgments is included in notes 3 to 27 together with information about the
basis of calculation for each affected line item in the consolidated financial statements.
SIGNIFICANT ESTIMATES
The areas involving significant estimates are:
Estimated value in use and/or fair value less costs to sell of CGUs used in goodwill and broadcasting licences
impairment testing — Note 16
Estimation of fair value of identified assets, liabilities and contingent consideration recorded in business
acquisitions — Notes 3 and 22
The other areas involving estimates are:
Estimation of current income tax payable and current income tax expense — Note 10
Recognition of deferred tax assets for tax losses available for carryforward — Note 10
Estimates are based on management’s best knowledge of current events and actions that the Corporation may undertake
in the future. Estimates and underlying assumptions are reviewed on an ongoing basis. Any revision to accounting
estimates are recognized in the year in which the estimates are revised and in any future years affected by these revisions.
Annual Report 2023 | Stingray Group Inc. | 97
Notes to Consolidated Financial Statements
Years ended March 31, 2023 and 2022
(In thousands of Canadian dollars, unless otherwise stated)
CRITICAL JUDGMENTS
Critical judgements in applying accounting policies that have the most significant effect on the amounts recognized in the
consolidated financial statements include the following:
Impairment of non-current assets
For the purpose of impairment testing of property and equipment, intangible assets, broadcast licences and
goodwill, management must use its judgment to identify the smallest group of assets that generates cash inflows
that are largely independent of those from other assets (“cash generating unit” or ”CGU”).
Useful lives of broadcast licences
The Corporation has concluded that broadcast licences are indefinite life intangible assets because they are
renewed every seven years without significant cost and there is a low likelihood of the renewal being denied.
Identifying a business acquisition
Management must use its judgment in determining whether a transaction is a business combination or a purchase
of assets in accordance with the criteria established in IFRS 3 Business combinations. The acquisition of an asset
or a group of assets that constitute a business is accounted for as a business combination and may give rise to
goodwill, whereas an asset purchase does not, thereby impacting subsequent amortization expense and/or
impairment testing results.
Lease term of contracts with renewal options
The Corporation determines the lease term as the non-cancellable term of the lease, together with any periods
covered by an option to extend the lease if it is reasonably certain to be exercised, or any periods covered by an
option to terminate the lease, if it is reasonably certain not to be exercised. After the commencement date, the
Corporation reassesses the lease term for whether significant event or change in circumstances that is within its
control and affects its ability to exercise (or not to exercise) the option to renew (e.g., a change in business
strategy) has occurred.
Annual Report 2023 | Stingray Group Inc. | 98
Notes to Consolidated Financial Statements
Years ended March 31, 2023 and 2022
(In thousands of Canadian dollars, unless otherwise stated)
29. FINANCIAL INSTRUMENTS
FAIR VALUES
The Corporation has determined that the carrying amount of cash and cash equivalents, trade and other receivables,
accounts payable and accrued liabilities and current portion of other liabilities excluding the contingent consideration is a
reasonable approximation of their fair value due to the short-term maturity of those instruments. As such, information on their
fair values is not presented below. The fair value of the credit facilities approximates its carrying value as it bears interest at
prime or banker’s acceptance rates plus a credit spread, which approximate current rates that could be obtained for debts
with similar terms and credit risk. The fair value of derivative financial instruments is determined using an evaluation of the
estimated market value, adjusted for the credit quality of the counterparty. The carrying amount of CRTC tangible benefits
and balance payable on business acquisitions is a reasonable approximation of their fair value as they are discounted using
the effective interest rate, which approximate current rates that could be obtained with similar terms and credit risk. Balance
payable on business acquisitions is carried at amortized cost and its fair value is categorized under level 2 and measured
based upon discounted future cash flows using a discount rate, adjusted for the Company’s own credit risk, that reflects
current market conditions for instruments with similar terms and risks.
The tables below summarize the carrying and fair value of financial assets and liabilities, including their level in the fair
value hierarchy, as at March 31, 2023 and 2022. The Corporation uses the following hierarchy for determining and
disclosing the fair value of financial instruments by valuation techniques:
Level 1:
quoted price (unadjusted) in active markets for identical assets or liabilities;
Level 2:
other techniques for which all inputs that have a significant effect in the
recorded value are observable, either directly or indirectly; and
Level 3:
techniques which use inputs that have a significant effect on the recorded fair
value that are not based on observable market data.
As at March 31, 2023
Carrying value
Fair value
Level 1
Level 2
Level 3
Financial assets measured at amortized cost
Cash and cash equivalents
Trade and other receivables
Financial assets measured at fair value
Investments
Financial liabilities measured at
amortized cost
Credit facilities
Subordinated debt
Accounts payable and accrued liabilities
CRTC tangible benefits
Accrued pension benefit liability
Performance share unit payable
Balance payable on business acquisitions
Financial liabilities measured at fair value
Contingent consideration
Derivative financial instruments
$
$
$
15,453
66,057
1,845
$
1,845 $
— $
— $
1,845
360,990
25,543
68,748
14,765
2,707
2,136
3,428
$
3,392
$
21,117
2,203
$
21,117 $
2,203
— $
—
— $ 21,117
—
2,203
Annual Report 2023 | Stingray Group Inc. | 99
Notes to Consolidated Financial Statements
Years ended March 31, 2023 and 2022
(In thousands of Canadian dollars, unless otherwise stated)
As at March 31, 2022
Carrying value
Fair value
Level 1
Level 2
Level 3
Financial assets measured at amortized cost
Cash and cash equivalents
Trade and other receivables
Financial assets measured at fair value
Investments
Financial liabilities measured at
amortized cost
Credit facilities
Subordinated debt
Accounts payable and accrued liabilities
CRTC tangible benefits
Accrued pension benefit liability
Performance share unit payable
Balance payable on business acquisitions
Financial liabilities measured at fair value
Contingent consideration
Derivative financial instruments
Fair value measurement (Level 3):
$
$
$
14,563
62,410
1,615
$
1,615 $
— $
— $
1,615
358,203
25,442
62,768
28,240
2,837
5,046
2,559
$
19,204
1,464
$
19,204 $
1,464
— $
—
— $ 19,204
—
1,464
Balance as at March 31, 2021
Change in fair value, including foreign exchange differences
Additions
Addition through business acquisition
Settlements
Balance as at March 31, 2022
Change in fair value, including foreign exchange differences
Additions
Additions through business acquisitions
Settlements
Balance as at March 31, 2023
INVESTMENTS
Investments
Contingent
consideration
900 $
12
703
—
—
1,615 $
40
190
—
—
1,845 $
14,456
(7,598)
—
15,807
(3,461)
19,204
1,098
—
1,243
(428)
21,117
$
$
$
For the years ended March 31, 2023 and 2022, the equity instruments in a private entity were classified as financial assets
at fair value through profit and loss. A change of 5% in the liquidity discount would have increased / decreased the fair
value of the investments by approximately $92 and $81 during the years ended March 31, 2023 and 2022 respectively.
Annual Report 2023 | Stingray Group Inc. | 100
Notes to Consolidated Financial Statements
Years ended March 31, 2023 and 2022
(In thousands of Canadian dollars, unless otherwise stated)
CONTINGENT CONSIDERATION
The contingent consideration related to business combinations is payable based on the achievement of targets for growth
in revenues for a period from the date of the acquisition and upon renewal of client contracts. The fair value measurement
of the contingent consideration is determined using unobservable (Level 3) inputs. These inputs include (i) the estimated
amount and timing of projected cash flows; and (ii) the risk-adjusted discount rate used to discount the cash flows which
is based on the risk associated with the revenue targets being met. If projected cash flows were 10% higher, the fair value
would have increased by $2,111 and if projected cash flows were 10% lower, the fair value would have decreased by
$2,111. Discount rates ranging from 15% to 47% have been applied and consider the time value of money. A change in
the discount rate by 100 basis points would have increased / decreased the fair value by $37.
The contingent consideration is classified as a financial liability and is included in other liabilities (note 22). The change in
fair value is recognized in net finance expense (income) (Note 8).
CREDIT RISK
Credit risk is the risk of an unexpected financial loss to the Corporation if a customer or counterparty to a financial
instrument fails to meet contractual obligations, and it arises primarily from the Corporation's trade and other receivables.
The Corporation’s credit risk is principally attributable to its trade receivables. The amounts presented in the consolidated
statements of financial position are net of an allowance for expected credit risk, estimated by the Corporation’s
management and based, in part, on the age of the specific receivable balance and the current and expected collection
trends. The Corporation's exposure to credit risk is mainly influenced by the characteristics of each customer. Generally,
the Corporation does not require collateral or other security from customers for trade receivables; however, credit is
extended following an evaluation of creditworthiness. In addition, the Corporation performs ongoing credit reviews of its
customers.
An allowance for expected credit losses is maintained to reflect an impairment risk for trade accounts receivable based on
an expected credit loss model. Bad debts are also provided for based on collection history and specific risks identified on
a customer-by-customer basis.
The aging of trade receivable balances and the allowance for doubtful accounts as at March 31, 2023 and March 31, 2022
were as follows:
Current
Past due 0-30 days
Past due 31-60 days
Past due 61-90 days
Past due more than 90 days
Total trade receivables
Less : allowance for expected credit losses
2023
30,271
13,880
8,312
4,786
11,717
68,966
(7,833)
61,133
$
$
2022
25,867
12,252
7,363
4,171
7,067
56,720
(5,929)
50,791
$
$
Annual Report 2023 | Stingray Group Inc. | 101
Notes to Consolidated Financial Statements
Years ended March 31, 2023 and 2022
(In thousands of Canadian dollars, unless otherwise stated)
The movement in the allowance for expected credit losses in respect of trade receivables was as follows:
Balance, beginning of year
Bad debt expense
Other reserve increase
Balance, end of year
2023
5,929
1,144
760
7,833
$
$
2022
3,198
88
2,643
5,929
$
$
The Corporation also has credit risk relating to cash and cash equivalents and other receivables. The Corporation manages
its risk by transacting only with sound financial institutions.
The carrying amounts of financial assets in the consolidated statements of financial position represent the Corporation's
maximum credit exposure.
LIQUIDITY RISK
Liquidity risk is the risk that the Corporation will not be able to meet its financial obligations as they become due. The
Corporation manages liquidity risk by continuously monitoring actual and budgeted cash flows under both normal and
stressed conditions. The Board of Directors also reviews and approves the Corporation’s operating and capital budgets,
as well as any material transactions out of the ordinary course of business, including proposals on mergers, acquisitions
or other major investments or divestitures.
The following are the contractual maturities of financial liabilities including estimated interest payments as at
March 31, 2023:
Credit facilities
Subordinated debt
Accounts payables and
accrued liabilities
Other liabilities
MARKET RISK
Total carrying
amount
Contractual
cash flows
Less than 1
year
1 to 5 years
More than 5
years
$
360,990
25,543
$ 361,854
25,600
$
7,500
—
$ 354,354
25,600
$
74,826
47,984
74,826
49,712
74,826
32,898
—
14,978
—
—
—
1,836
Market risk is the risk that the changes in market prices, such as foreign exchange rates, interest rates and equity prices,
will affect the Corporation's earnings or the value of its holdings of financial instruments. The objective of market risk
management is to manage and control market risk exposure within acceptable parameters, while optimizing the return on
risk.
CURRENCY RISK
The Corporation is exposed to currency risk on sales and expenses that are denominated in currencies other than the
functional currency of the Corporation’s subsidiaries, primarily the US dollar (“USD”) and the euro (“EURO”). Also,
additional earnings variability arises from the translation of monetary assets and liabilities denominated in currencies other
than the functional currency of the Corporation’s subsidiaries at the rate of exchange at each balance sheet date, the
impact of which is reported as a foreign exchange gain or loss in the consolidated statements of comprehensive income.
The Corporation's objective in managing its foreign currency risk is to minimize its net exposure to foreign currency cash
flows, by transacting with third parties in the above currencies to the maximum extent possible and practical, given that
this will act as natural economic hedges for each of these currencies.
Annual Report 2023 | Stingray Group Inc. | 102
Notes to Consolidated Financial Statements
Years ended March 31, 2023 and 2022
(In thousands of Canadian dollars, unless otherwise stated)
The Corporation's exposure to currency risk on its consolidated financial statements was as follows:
Cash and cash equivalents
Trade receivables
Investments
Credit facilities
Accounts payable and accrued liabilities
Contingent consideration and
balance payable on business acquisitions
Net balance exposure
Equivalent in Canadian dollars
March 31, 2023
USD
EURO
March 31, 2022
USD
EURO
6,183
4,710
2,807
(12,000)
(461)
677
1,761
—
(10,000)
(280)
(3,304)
(2,065)
(2,795)
—
(7,842)
(11,572)
4,887
3,654
2,850
(7,800)
(1,099)
—
2,492
3,114
680
1,580
—
(3,800)
(219)
—
(1,759)
(2,437)
The following exchange rates are those applicable to the following periods and dates:
USD per CAD
EURO per CAD
1.3228
1.3773
1.3533
1.4757
1.2535
1.4573
1.2496
1.3853
2023
2022
Average
Reporting
Average
Reporting
Based on the Corporation’s foreign currency exposures noted above, varying the above foreign exchange rates to reflect
a 5% strengthening of the US dollar and EURO would have the following impacts on net income, assuming that all other
variables remained constant:
Increase (decrease) in net income
(139)
(579)
March 31, 2023
USD
EURO
March 31, 2022
USD
156
EURO
(122)
An assumed 5% weakening of the foreign currency would have had an equal but opposite effect on the basis that all other
variables remained constant.
To manage its currency risk, the Corporation entered into foreign exchange forward contracts during the year ended
March 31, 2023. The table below summarizes the contracts effective as at March 31, 2023:
Maturity
Foreign exchange forward
contracts
0 to 12 months
13 to 24 months
Type
Contract
exchange rate
Contractual
amount
Mark-to-market
liabilities (assets)
as at
March 31, 2023
USD Sale
USD Sale
1.2831 – 1.3000
1.3260 – 1.3565
$
$
24,000
24,000
48,000
$
$
1,121
(106)
1,015
Annual Report 2023 | Stingray Group Inc. | 103
Notes to Consolidated Financial Statements
Years ended March 31, 2023 and 2022
(In thousands of Canadian dollars, unless otherwise stated)
INTEREST RATE RISK
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in
market interest rates. The Corporation holds the majority of its cash and cash equivalents balance in accounts bearing
interest at rates less than 1.25%. The Corporation is, therefore, not materially exposed to future cash flow fluctuations
coming from changes in market interest rates for its cash and cash equivalents. Cash equivalents consist of term deposits
with original maturities of less than three months and are, therefore, also exposed to interest rate risk on fair value. However,
fair value risk is not significant, considering the relatively short term to maturity of these instruments.
The credit facilities are variable interest rate instruments that are due in more than one year. This instrument is exposed
to changes in future interest rates that could result in future cash flow fluctuations. To manage its interest rate risk, the
Corporation entered into interest rate swap agreements.
The table below summarizes the interest rate contracts effective as at March 31, 2023 and 2022:
Maturity
Swaptions
October 25, 2024
October 25, 2024
Swap
September 29, 2026
Fixed interest
rate (when
applicable)
—
—
Currency
CAD
CAD
CAD
3.5975%
Initial nominal
value
$ 100,000
100,000
200,000
70,000
$ 270,000
Mark-to-market
assets (liabilities)
as at
March 31, 2023
Mark-to-market
assets (liabilities)
as at
March 31, 2022
$
$
(490)
(699)
(1,189)
1
(1,188)
$
$
(604)
(860)
(1,464)
—
(1,464)
During the year ended March 31, 2022, the Corporation unwound three interest rate swaps with maturity date of
October 25, 2024 and made payments totaling $600.
Given that the Corporation did not elect to apply hedge accounting during the years ended March 31, 2023 and 2022,
mark-to-market gains (losses) of $(739) and $3,397 were recorded in net finance expense (income), respectively.
Annual Report 2023 | Stingray Group Inc. | 104
Notes to Consolidated Financial Statements
Years ended March 31, 2023 and 2022
(In thousands of Canadian dollars, unless otherwise stated)
30. CAPITAL MANAGEMENT
The Corporation’s objectives when managing capital are as follows:
Pursue its growth strategy through acquisitions and organic growth by maintaining financial flexibility; and
Provide the Corporation’s shareholders with an appropriate return on their investment.
For capital management, the Corporation has defined its capital as the combination of net debt and total equity.
Total managed capital is as follows:
Contingent consideration, including current portion
Balance payable on business acquisitions, including current portion
Credit facilities
Subordinated debt
Cash and cash equivalents
Net debt, including contingent consideration and
balance payable on business acquisition
Total equity
2023
21,117
3,428
360,990
25,543
(15,453)
395,625
286,269
681,894
$
$
2022
19,204
2,559
358,203
25,442
(14,563)
390,845
273,529
664,374
$
$
The Corporation’s financing strategy is to maintain a flexible structure, to respond adequately to the changes in economic
conditions and to allow growth through business acquisitions. The Corporation monitors its capital structure using the net
debt to adjusted EBITDA ratio. Refer to note 4 for more information about the EBITDA.
In order to maintain or adjust the capital structure, the Corporation may adjust the amount of dividends paid to shareholders
of the Corporation, issue or repay debt, issue shares or undertake any other activities as deemed appropriate under the
specific circumstances, on a quarterly basis.
31. TRANSACTIONS WITH KEY MANAGEMENT PERSONNEL AND RELATED PARTIES
KEY MANAGEMENT PERSONNEL
The key management personnel of the Corporation are the Chief Executive Officer, Chief Financial Officer and other key
employees of the Corporation.
Key management personnel compensation and director’s fees are as follows:
Short-term employee benefits
Share-based compensation
Performance share units
Deferred share units
RELATED PARTIES
2023
5,444
358
1,213
(282)
6,733
$
$
2022
5,074
525
2,533
954
9,086
$
$
Related parties of the Corporation include Directors and key management personnel, their family members and companies
over which they have significant influence or control. The Corporation has transacted with related parties during the
reporting period. These transactions are measured at the exchange amount, which is the amount of consideration
established and agreed to by the related parties having normal trade terms.
Annual Report 2023 | Stingray Group Inc. | 105
Notes to Consolidated Financial Statements
Years ended March 31, 2023 and 2022
(In thousands of Canadian dollars, unless otherwise stated)
During the year ended March 31, 2023, the Corporation recognized revenues amounted to $689 (2022 — $794) for
advertising sold to companies controlled by directors of the Corporation.
32. BASIS OF PREPARATION
A) STATEMENT OF COMPLIANCE
The consolidated financial statements of the Corporation have been prepared in accordance with IFRS as issued by
the International Accounting Standards Board (''IASB'').
The consolidated financial statements were authorized for issue by the Board of Directors on June 6, 2023.
B) BASIS OF MEASUREMENT
The consolidated financial statements have been prepared on the historical cost basis, except for the following:
Contingent consideration payable which is measured at fair value at each reporting period in accordance with
IFRS 3;
Investments measured at fair value at year-end in accordance with IFRS 9;
Cost of defined benefit pension plans and present value of the net pension obligation measured at fair value in
accordance with IAS 19;
Liabilities related to deferred share unit plan, performance share unit plan measured at fair value at year-end in
accordance with IFRS 2;
Equity stock options which are measured at fair value at date of grant pursuant to IFRS 2; and
Assets and liabilities acquired in business combinations are measured at fair value at acquisition date.
Derivative financial instruments are measured at fair value, determined by using an evaluation of the estimated
market value, adjusted for the credit quality of the counterparty in accordance with IFRS 9.
C) FOREIGN CURRENCY TRANSLATION
FUNCTIONAL AND PRESENTATION CURRENCY
Items included in the financial statements of each of the subsidiaries are measured using the currency of the primary
economic environment in which the subsidiary operates (the ‘functional currency’). The consolidated financial
statements are presented in Canadian dollars, which is the Corporation’s functional and presentation currency. All
financial information presented in Canadian dollars has been rounded to the nearest thousand.
TRANSACTIONS AND BALANCES
Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the
transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the
translation of monetary assets and liabilities denominated in foreign currencies at year end exchange rates are
recognized in profit or loss. Translation differences on assets and liabilities carried at fair value are reported as part of
the fair value gain or loss. Non-monetary items that are measured in terms of historical cost in a foreign currency are
translated using the exchange rate at the date of the transaction. Foreign currency gains and losses are reported on
a net basis.
Annual Report 2023 | Stingray Group Inc. | 106
Notes to Consolidated Financial Statements
Years ended March 31, 2023 and 2022
(In thousands of Canadian dollars, unless otherwise stated)
SUBSIDIARIES
The results and financial position of foreign operations (none of which has the currency of a hyperinflationary
economy) that have a functional currency different from the presentation currency are translated into the presentation
currency as follows:
assets and liabilities for each financial position presented are translated at the closing rate at the date of that
financial position;
income and expenses for each statement of income and statement of comprehensive income are translated at
average exchange rates (unless this is not a reasonable approximation of the cumulative effect of the rates
prevailing on the transaction dates, in which case income and expenses are translated at the dates of the
transactions); and
all resulting exchange differences are recognized in other comprehensive income (loss).
Goodwill and fair value adjustments arising on the acquisition of a foreign operation are treated as assets and
liabilities of the foreign operation and are translated at the closing rate.
33. SIGNIFICANT ACCOUNTING POLICIES
The accounting policies set out below have been applied consistently to all years presented in these consolidated financial
statements and have been applied consistently by the Corporation’s subsidiaries.
(A) BASIS OF CONSOLIDATION
BUSINESS COMBINATIONS
The Corporation measures goodwill as the excess of the fair value of the consideration transferred which includes the
fair value of contingent consideration, over the net recognized amount (generally fair value) of the identifiable assets
acquired and liabilities assumed, all measured as of the acquisition date. When the excess is negative, a bargain
purchase gain is recognized immediately in profit or loss.
Transaction costs, other than those associated with the issue of debt or equity securities, that the Corporation incurs
in connection with a business combination are expensed as incurred.
SUBSIDIARIES
Subsidiaries are entities controlled by the Corporation. The Corporation controls an entity when it is exposed to, or
has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its
power over the entity. The financial statements of subsidiaries are included in the consolidated financial statements
from the date that control commences until the date that control ceases.
These consolidated financial statements include the accounts of the Corporation and its wholly-owned subsidiaries,
Stingray Music USA Inc. and its subsidiaries Pop Radio LLC, 2144286 Ontario Inc., 4445694 Canada Inc., Pay Audio
Services Limited Partnership, Music Choice Europe Limited, Stingray Digital International Ltd., Stingray Europe B.V.,
Transmedia Communications SA, SBA Music PTY Ltd., Stingray Music, S.A. de C.V., DJ Matic NV, Stingray Radio Inc.
and Calm Radio Corp. and all these entities’ wholly owned subsidiaries.
Annual Report 2023 | Stingray Group Inc. | 107
Notes to Consolidated Financial Statements
Years ended March 31, 2023 and 2022
(In thousands of Canadian dollars, unless otherwise stated)
INVESTMENT IN ASSOCIATES
An associate is an entity over which the Corporation has significant influence. The Corporation has significant influence
when it has the power to participate in the financial and operating policy decisions of the investee but does not have
control or joint control. The Corporation accounts for its investment in an associate using the equity method. Under
the equity method, the investment is initially recognized at cost. Subsequent to initial recognition, the consolidated
financial statements include the Corporation’s share of the earnings and losses of the associate until the date
significant influence ceases. Distributions received from an associate reduce the carrying amount of the investment.
The consolidated statements of comprehensive income include the Corporations’ share of any amounts recognized
by its associate in other comprehensive income, if any. Intercompany balances between the Corporation and its
associate are not eliminated.
INTEREST IN JOINT VENTURE
A joint venture is an arrangement whereby the Corporation and other parties that have joint control of the arrangement
have rights to the net assets of the arrangement. The Corporation accounts for its interest in a joint venture using the
equity method. Under the equity method, the joint venture is initially recognized at cost. Subsequent to initial
recognition, the consolidated financial statements include the Corporation’s share of the earnings and losses in the
joint venture. Distributions received from a joint venture reduce the carrying amount of the investment. Additionally,
the Corporation makes capital calls, which are treated as additions to the investment in the joint venture.
TRANSACTIONS ELIMINATED ON CONSOLIDATION
Intra-group balances and transactions, and any unrealized income and expenses arising from intra-group transactions,
are eliminated in preparing the consolidated financial statements.
(B) FINANCIAL INSTRUMENTS
FINANCIAL ASSETS AND FINANCIAL LIABILITIES
The Corporation initially recognizes financial assets on the trade date at which the Corporation becomes a party to the
contractual provisions of the instrument.
On initial recognition, the Corporation classifies its financial assets as subsequently measured at either amortized cost
or fair value, depending on its business model for managing the financial assets and the contractual cash flow
characteristics of the financial assets. If the financial asset is not subsequently accounted for at fair value through profit
or loss, then the initial measurement includes transaction costs that are directly attributable to the asset’s acquisition
or origination.
Financial assets measured at amortized cost
A financial asset is measured at amortized cost if both of the following conditions are met and is not designated as at
fair value through profit and loss:
The asset is held within a business model whose objective is to hold the asset in order to collect contractual
cash flows.
The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments
of principal and interest on the principal amount outstanding.
The Corporation currently classifies its cash and cash equivalents and trade and other receivables as financial assets
measured at amortized cost.
Annual Report 2023 | Stingray Group Inc. | 108
Notes to Consolidated Financial Statements
Years ended March 31, 2023 and 2022
(In thousands of Canadian dollars, unless otherwise stated)
Financial assets measured at fair value
All equity investments and other financial assets that do not meet the conditions to be classified as financial assets
measured at amortized cost are measured at fair value through profit and loss.
Changes therein, including any interest or dividend income, are recognized in profit or loss.
The Corporation’s investments are classified as financial assets measured at fair value through profit and loss.
The Corporation derecognizes a financial asset when the contractual rights to the cash flows from the asset expire, or
it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and
rewards of ownership of the financial asset are transferred, or it neither transfers not retains substantially all of the
risks and rewards of ownership and does not retain control over the transferred asset. Any interest in such
derecognized financial assets that is created or retained by the Corporation is recognized as a separate asset or
liability.
Financial liabilities
The Corporation initially recognizes debt securities issued and subordinated liabilities on the date that they are
originated. All other financial liabilities are recognized initially on the trade date at which the Corporation becomes a
party to the contractual provisions of the instruments.
Financial liabilities are initially measured at fair value. If the financial liabilities are not subsequently accounted for at
fair value through profit or loss, then the initial measurement includes directly attributable transaction costs.
The Corporation classifies all financial liabilities at amortized cost using the effective interest method, except for
contingent consideration recorded at fair value through profit and loss and financial liabilities designated at fair value
through profit or loss when doing so results in more relevant information. Such liabilities shall be subsequently
measured at fair value.
The Corporation derecognizes a financial liability when its contractual obligations are discharged or cancelled or
expire.
Financial assets and liabilities are offset and the net amount presented in the consolidated statements of financial
position when, and only when, the Corporation has a legal right to offset the amounts and intends either to settle on a
net basis or to realize the asset and settle the liability simultaneously.
Derivative financial instruments
The Corporation use derivative financial instruments to manage its interest rate risk on its credit facilities and its
currency risk on its trade and does not use these instruments for speculative or trading purposes. The Corporation
does not apply hedge accounting and therefore mark-to-market gains or losses are recognized in net finance expense
(income).
IMPAIRMENT OF FINANCIAL ASSETS
The Corporation recognizes loss allowances for expected credit losses (ECLs) on financial assets measured at
amortized cost. Loss allowances for trade receivables are always measured at an amount equal to lifetime ECLs. The
maximum period considered when estimating ECLs is the maximum contractual period over which the Corporation is
exposed to credit risk. ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the
present value of all cash shortfalls (i.e. the difference between the cash flows due to the entity in accordance with the
contract and the cash flows that the Corporation expects to receive). ECLs are discounted at the effective interest rate
of the financial asset.
Annual Report 2023 | Stingray Group Inc. | 109
Notes to Consolidated Financial Statements
Years ended March 31, 2023 and 2022
(In thousands of Canadian dollars, unless otherwise stated)
ECLs on trade and other receivables is assessed by portfolio based on factors that may include the Corporation's past
experience with debt recovery, an increased number of days exceeding payment terms in the portfolio, as well as a
change - internationally or nationally - in economic conditions correlating with default payments.
Loss allowances for financial assets measured at amortized cost are deducted from the gross carrying amount of the
assets and is recognized in profit or loss.
If, in a subsequent year, the amount of the impairment loss decreases and the decrease can be related objectively to
an event occurring after the impairment was recognized (such as an improvement in the debtor's credit rating), the
previously recognized impairment loss is reversed. The reversal is recognized to the extent of the improvement without
exceeding what the amortized cost would have been had the impairment not been recognized at the date the
impairment is reversed. The amount of the reversal is recognized in profit or loss.
(C) REVENUE RECOGNITION
CONTRACTS WITH CUSTOMERS
The Corporation records revenues from contracts with customers in accordance with the five steps in IFRS 15
Contracts with customers as follows:
1)
2)
Identify the contract with a customer;
Identify the performance obligations in the contract;
3) Determine the transaction price, which is the total consideration provided by the customer;
4) Allocate the transaction price among the performance obligations in the contract based on their relative fair
values; and
5) Recognize revenues when the relevant criteria are met for each performance obligation.
Revenues are measured based on the value of the expected consideration in a contract with a customer and are
recognized when control of a product or service is transferred to a customer.
A contract asset is recognized in the consolidated statement of financial position when revenues are earned without
having been invoiced. Contract assets are presented in “Other current assets”. A contract liability is recognized when
the Corporation has received consideration in advance of the transfer of products or services to a customer.
Broadcasting and commercial music segment
The Broadcasting and commercial music segment specializes in the broadcast of music and videos on multiple
platforms and digital signage experiences and generates revenues from subscriptions or contracts.
Subscriptions
The Corporation recognize revenues related to continuous music and video distribution over time, as the customer
receives and consumes the benefits of the music supply at the same time it is broadcasted. On-demand products,
primarily music and concerts services, are also recognized over time as the customer receives and consumes the
benefits of the on-demand product at the same time it is broadcasted. The Corporation records contract liabilities
when customers pay their subscription fees in advance.
Equipment and labor
For equipment and labor projects, mainly bundled arrangements, the Corporation accounts for individual products
and services when they are separately identifiable, and the customer can benefit from the product or service on its
own or with other readily available resources. The total arrangement consideration is allocated to each product or
service on its own or with other readily available resources based on its stand-alone selling price.
Annual Report 2023 | Stingray Group Inc. | 110
Notes to Consolidated Financial Statements
Years ended March 31, 2023 and 2022
(In thousands of Canadian dollars, unless otherwise stated)
The Corporation generally determines stand-alone selling prices based on the observable prices for products sold
separately without a service contract, adjusted for market conditions and other factors, as appropriate. When similar
products and services are not sold separately, the Corporation uses the expected cost plus margin approach to
determine stand-alone selling prices. The Corporation recognizes revenues for each individual product or service,
when the related performance obligations are satisfied, which is usually at a point in time for sale of equipment and
over time for music related services.
Advertising
The Corporation recognize revenues related to advertising generally at a point in time, when the advertising airs in the
network. Advertising reaches the customers by Retail media, Streaming media and Broadcast media. Retail media
includes in-store licensed music, music video, digital signage and consumer insights, Streaming media includes music
and soundscapes across web and mobile and FAST channels and Broadcast media includes concerts, shows, music
videos and TV audio channels.
Radio segment
The radio segment operates radio stations across Canada and generates revenues from advertising. Advertising
revenues are recognized at a point in time when the advertising airs on the Corporation’s radio stations. Revenues are
recorded net of any agency commissions as these charges are paid directly to the agency by the advertiser.
(D) RESEARCH AND DEVELOPMENT
Expenditure on research activities, undertaken with the prospect of gaining new scientific or technical knowledge and
understanding, is recognized in profit or loss as incurred.
Development costs, net of tax credits, are recognized in profit or loss as incurred, unless the costs can be measured
reliably, the product or process is technically feasible, future economic benefits are probable and the Corporation
intends to and has sufficient resources to complete the development and to use or sell the asset. In such a case, costs
are recognized as internally developed intangible assets (see (m) intangible assets).
(E) GOVERNMENT ASSISTANCE
Government assistance is recognized when there is reasonable assurance that the Corporation will comply with the
requirements of the approved grant or subsidy program and the Corporation, based on management's judgment, is
reasonably certain that the government assistance will be received. Government assistance related to operating
expenses, including salary subsidy such as the Canada Emergency Wage Subsidy, is recorded as a reduction of such
expenses. Investment tax credits are accounted for as a reduction of the research and development costs during the
year in which the costs are incurred.
The investment tax credits must be reviewed and approved by the tax authorities and it is possible that the amounts
granted will differ from the amounts recorded.
(F) LEASES AND PAYMENTS
Operating leases are not recognized in the Corporation’s consolidated statements of financial position. Payments
made under operating leases are recognized in profit or loss on a straight-line basis over the term of the lease. Lease
incentives received are recognized as an integral part of the total lease expense, over the term of the lease. Contingent
lease payments are accounted for in the year in which they are incurred.
Annual Report 2023 | Stingray Group Inc. | 111
Notes to Consolidated Financial Statements
Years ended March 31, 2023 and 2022
(In thousands of Canadian dollars, unless otherwise stated)
(G) FINANCE INCOME AND FINANCE COSTS
Finance income comprises interest income on funds invested, change in fair value of contingent consideration. Interest
income is recognized as it accrues in profit or loss, using the effective interest method.
Finance costs comprise interest expense on credit facilities, unwinding of the discount on provisions, change in fair
value of derivatives and contingent consideration, amortization of deferred financing costs, foreign exchange (gain)
loss and impairment losses recognized on financial assets.
The Corporation recognizes finance income and finance costs as a component of operating activities in the
consolidated statements of cash flows.
(H) INCOME TAXES
Income tax expense comprises current and deferred taxes. Current and deferred taxes are recognized in profit or loss
except to the extent that they relate to a business combination, or items recognized directly in equity or in other
comprehensive income.
Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted
or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years.
Deferred tax is recognized in respect of temporary differences between the carrying amounts of assets and liabilities
for financial reporting purposes and the amounts used for taxation purposes.
Deferred tax is not recognized for the following temporary differences:
temporary differences on the initial recognition of assets or liabilities in a transaction that is not a business
combination and that affects neither accounting nor taxable profit or loss;
temporary differences relating to investments in subsidiaries, associates and joint arrangements to the extent that
the Corporation is able to control the timing of the reversal of the temporary difference and it is probable that they
will not reverse in the foreseeable future; and
taxable temporary differences arising on the initial recognition of goodwill.
A deferred tax asset is recognized for unused tax losses, unused tax credits and deductible temporary differences to
the extent that it is probable that future taxable profit will be available against which they can be used. Deferred tax
assets are measured at the end of each reporting year and their carrying amount is reduced to the extent that it is no
longer probable that a taxable profit will be realized.
Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse,
based on the laws that have been enacted or substantively enacted by the reporting date.
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and
assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax
entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be
realized simultaneously.
(I) EARNINGS PER SHARE
Basic earnings per share are computed by dividing net earnings by the weighted average number of subordinate
voting shares, variable subordinated voting shares and multiple voting shares outstanding during the year. Diluted
earnings per share are computed using the weighted average number of common shares, subordinate voting shares,
variable subordinated voting shares and multiple voting shares outstanding during the year adjusted to include the
Annual Report 2023 | Stingray Group Inc. | 112
Notes to Consolidated Financial Statements
Years ended March 31, 2023 and 2022
(In thousands of Canadian dollars, unless otherwise stated)
dilutive impact of stock options, performance share units and deferred share units. The number of additional shares
is calculated by assuming that all instruments with a dilutive effect are exercised and that the proceeds from such
exercises, as well as the amount of unrecognized share-based compensation which is considered to be assumed
proceeds, are used to repurchase subordinate voting shares, variable subordinated voting shares and multiple voting
shares at the average share price for the year. For performance share units, only the unrecognized share-based
compensation is considered assumed proceeds since there is no exercise price paid by the holder.
(J) CASH AND CASH EQUIVALENTS
Cash and cash equivalents consist of cash on hand and balances with banks.
(K) INVENTORIES
Inventories are measured at the lower of cost and net realizable value. The cost of inventories is based on the first-in,
first-out cost method.
Net realizable value is the estimated selling price in the ordinary course of business, less the estimated selling
expenses.
(L) PROPERTY AND EQUIPMENT
RECOGNITION AND MEASUREMENT
Items of property and equipment are recognized at cost less accumulated depreciation and accumulated impairment
losses. Cost includes expenditure that is directly attributable to the acquisition of the asset and the costs of dismantling
and removing the item and restoring the site on which it is located, if any.
When parts of an item of property and equipment have different useful lives, they are accounted for as separate items
(major components).
Gains and losses on disposal of an item of property and equipment are determined by comparing the proceeds from
disposal with the carrying amount, and are recognized in profit or loss.
SUBSEQUENT COSTS
The cost of replacing a part of an item of property and equipment is recognized in the carrying amount of the item if
it is probable that the future economic benefits embodied within the part will flow to the Corporation, and its cost can
be measured reliably. The carrying amount of the replaced part is derecognized. The costs of the day-to-day servicing
of property and equipment are recognized in profit or loss as incurred.
DEPRECIATION
Depreciation is calculated over the cost of the asset less its residual value and is recognized in profit or loss on a
straight-line basis over the estimated useful lives of each part of an item of property and equipment, since this most
closely reflects the expected pattern of consumption of the future economic benefits embodied in the asset. Leased
assets are depreciated over the shorter of the lease term and their useful lives, unless it is reasonably certain that the
Corporation will obtain ownership by the end of the lease term.
Annual Report 2023 | Stingray Group Inc. | 113
Notes to Consolidated Financial Statements
Years ended March 31, 2023 and 2022
(In thousands of Canadian dollars, unless otherwise stated)
The estimated useful lives for the current and comparative years are as follows:
Property and equipment
Building
Broadcasting infrastructure
Furniture, fixtures and equipment
Computer hardware
Leasehold improvements
Period
20 to 60 years
8 to 25 years
3 to 10 years
4 to 6 years
Lease term
Estimates for depreciation methods, useful lives and residual values are reviewed at each reporting year-end and
adjusted if appropriate prospectively.
(M) INTANGIBLE ASSETS, EXCLUDING BROADCAST LICENCES
Intangible assets that are acquired by the Corporation and have finite useful lives are measured at cost less
accumulated amortization and any accumulated impairment losses.
The fair value of non-compete agreements acquired in a business combination are based on the discounted estimated
revenues losses that have been avoided as a result of the non-compete being signed. The fair value of clients list and
relationships acquired in a business combination is determined using the multi-period excess earnings method,
whereby the subject asset is valued after deducting a fair return on all other assets that are part of creating the related
cash flows. The fair value of music catalogs acquired in a business combination is determined using the estimated
costs for creating such music catalogs. The fair value of trademarks acquired in a business combination is based on
the discounted estimated future royalty payments that have been avoided.
Amounts capitalized as internally developed intangible assets include the total cost of any external products or services
and labor costs directly attributable to development.
AMORTIZATION
Amortization is recognized in profit or loss on a straight-line basis over the estimated useful lives of the definite life
intangible assets.
Internally developed intangible assets, net of related tax credits, are amortized starting from the date the products and
services are commercialized.
The estimated useful lives for the current and comparative years are as follows:
Intangible assets
Internally developed software and apps
Music catalog
Client list and relationships
Trademarks
Licences, website applications and computer software
Non-compete agreements
Period
2 to 5 years
5 to 15 years
3 to 15 years
2 to 20 years
2 to 25 years
2 to 11 years
Estimates for amortization methods, useful lives and residual values are reviewed at each reporting year-end and
adjusted if appropriate prospectively.
Annual Report 2023 | Stingray Group Inc. | 114
Notes to Consolidated Financial Statements
Years ended March 31, 2023 and 2022
(In thousands of Canadian dollars, unless otherwise stated)
(N) LEASES
At inception of a contract, the Corporation assesses whether a contract is, or contains, a lease based on whether the
contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
The Corporation allocates the consideration in the contract to each lease and non-lease component on the basis of
their relative stand-alone prices. However, for leases of properties for which it is a lessee, the Corporation has elected
not to separate non-lease components and will instead account for the lease and non-lease components as a single
lease component. The right-of-use asset and a lease liability are recognized at the lease commencement date.
RIGHT-OF-USE ASSETS ON LEASES
The right-of-use asset is measured at cost. The cost is based on the initial amount of the lease liability plus initial direct
costs incurred, less lease incentives received, if any.
The cost of right-of-use assets is periodically reduced by amortization expenses and impairment losses, if any, and
adjusted for certain remeasurements of the lease liability. Right-of-use assets are amortized to reflect the expected
pattern of consumption of the future economic benefits which is based on the lesser of the useful life of the asset or
the lease term using the straight-line method. The lease term includes the renewal option only if it is reasonably certain
to be exercised. The lease terms range from 1 to 50 years for buildings and towers, from 10 to 99 years for land and
from 1 to 5 years for vehicles.
The Corporation elected not to recognize a right-of-use asset and liability for leases where the total lease term is less
than or equal to twelve months and for leases of low value assets; such as but not limited to, office equipment. The
lease payments associated with these leases are recognized as an expense on a straight-line basis over the lease
term.
LEASE LIABILITIES
At the commencement date of the lease, the Corporation recognizes lease liabilities measured at the present value of
lease payments to be made over the lease term. The lease payments include fixed payments less any lease incentives
receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual
value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain to be
exercised by the Corporation and payments of penalties for terminating a lease, if the lease term reflects the
Corporation exercising the option to terminate. The variable lease payments that do not depend on an index or a rate
are recognized as expense in the period in which the event or condition that triggered the payment has occurred.
In calculating the present value of lease payments, the Corporation uses the incremental borrowing rate as at the lease
commencement date if the interest rate implicit in the lease is not readily determinable. After the commencement date,
the amount of the lease liability is increased to reflect the accretion of interest and reduced to reflect the lease
payments made. In addition, the carrying amount of the lease liability is remeasured if there has been a modification,
a change in the lease term, a change in the in-substance fixed lease payments or a change in the assessment to
purchase the underlying asset.
(O) BUSINESS COMBINATION, GOODWILL AND BROADCAST LICENCES
Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the
aggregate of the consideration transferred, measured at the acquisition date fair value. Acquisition costs incurred are
expensed and included in acquisition, legal, restructuring and other expenses. The cost of a business combination is
allocated to the fair value of the related net identifiable tangible and intangible assets. The excess of the cost of the
acquired businesses over the fair value of the related net identifiable tangible and intangible assets acquired is
Annual Report 2023 | Stingray Group Inc. | 115
Notes to Consolidated Financial Statements
Years ended March 31, 2023 and 2022
(In thousands of Canadian dollars, unless otherwise stated)
allocated to goodwill. If the consideration is lower than the fair value of the net assets acquired, the difference is
recognized in the consolidated statements of comprehensive income (loss).
To receive approval to launch a new broadcast licence pursuant to applications made by the Corporation to the CRTC,
the CRTC may require the Corporation to commit to fund Canadian Content Development (“CCD”) during the initial
term of the licence over and above the prescribed annual requirements. These obligations are considered to be part
of the costs related to the award of new broadcast licences and are recognized as a liability upon the launch of the
new broadcast licence. Any other direct costs related to the award and launch of new broadcast licences are also
capitalized as broadcast licences. CCD that arises from a business acquisition is considered a transaction cost and is
expensed in the consolidated statements of comprehensive income (loss).
After initial recognition, goodwill and broadcast licences are recorded at cost less any accumulated impairment losses.
Both goodwill and broadcast licences have indefinite useful lives and are not amortized, but they are subject to an
impairment evaluation. Broadcast licences are deemed indefinite life assets since they are renewed every seven years
without significant cost, with the unlikely chance that the renewal will be denied; therefore, there is no foreseeable
limit to the period over which broadcast licences are expected to generate net cash flows for the Corporation.
(P) IMPAIRMENT OF NON-FINANCIAL ASSETS
The Corporation reviews the carrying amount of its non-financial assets, which include intangible assets with a finite
useful life and property and equipment on each reporting date in order to determine if specific events or changes in
circumstances indicate that their carrying amounts may not be recoverable. The recoverable amount of goodwill and
broadcast licences are tested for impairment each year at the same date, or more frequently if indications of
impairment exist.
For impairment testing purposes, assets that cannot be tested individually are grouped in CGUs. Goodwill is allocated
to the CGU or CGU group that is expected to benefit from the synergies resulting from the business combination.
Each unit or group of units to which goodwill is allocated shall not be larger than an operating segment and represents
the lowest level at which goodwill is monitored for internal management purposes.
An impairment loss is recognized if the carrying amount of an asset or a CGU exceeds its recoverable amount. The
recoverable amount is the higher of an asset's fair value less costs to sell and its value in use. Impairment losses are
recognized in profit or loss. Impairment losses are first allocated to reduce the carrying amount of goodwill allocated
to the CGU, and then to reduce the carrying amount of the other assets of the CGU on a pro rata basis.
(Q) PROVISIONS
A provision is recognized if, as a result of a past event, the Corporation has a present legal or constructive obligation
that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the
obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects
current market assessments of the time value of money and the risks specific to the liability. The unwinding of the
discount is recognized as finance cost.
CONTINGENT LIABILITY
A contingent liability is a possible obligation that arises from past events and of which the existence will be confirmed
only by the occurrence or non-occurrence of one or more uncertain future events not within the control of the
Corporation; or a present obligation that arises from past events (and therefore exists), but is not recognized because
it is not probable that a transfer or use of assets, provision of services or any other transfer of economic benefits will
be required to settle the obligation, or the amount of the obligation cannot be estimated reliably.
Annual Report 2023 | Stingray Group Inc. | 116
Notes to Consolidated Financial Statements
Years ended March 31, 2023 and 2022
(In thousands of Canadian dollars, unless otherwise stated)
(R) EMPLOYEE BENEFITS
SHORT-TERM EMPLOYEE BENEFITS
Short-term employee benefits are expensed as the related service is provided.
A liability is recognized for the amount expected to be paid if the Corporation has a present legal or constructive
obligation to pay this amount as a result of past service provided by the employee, and the obligation can be estimated
reliably.
Stock option plan
The fair value at the grant-date of equity settled share-based payment awards granted to management and key
employees of the Corporation is recognized as an employee benefit expense, with a corresponding increase in equity,
over the vesting period of the awards. The amount expensed is adjusted to reflect the number of awards for which it
is expected that the service conditions will be met, so that the amount ultimately expensed will depend on the number
of awards that meet the service conditions at the vesting date.
Performance share units and deferred share units plans
Performance unit plan and deferred share units expected to be settled in cash are accounted for as cash settled
awards, with the recognized compensation cost included in accounts payable and accrued liabilities. Compensation
cost is initially measured at fair value at the grant date and is recognized in net income over the vesting year. The
liability is remeasured based on the fair value price of the Corporation’s shares, at each reporting date.
Remeasurements during the vesting year are recognized immediately to net income to the extent that they relate to
past services and amortized over the remaining vesting year to the extent that they relate to future services. The
cumulative compensation cost that will ultimately be recognized is the fair value of the Corporation’s shares at the
settlement date.
Employee share purchase plan
The Corporation’s contributions, used to purchase shares on the open market on behalf of employees, are recognized
when incurred as an employee benefit expense, with a corresponding increase in contributed surplus. The amount
expensed is adjusted to reflect the number of awards for which it is expected that the vesting conditions will be met,
so that the amount ultimately expensed will depend on the number of awards that meet the vesting conditions at the
vesting date.
Unvested shares held in trust on behalf of employees are treasury shares and therefore deducted from equity until
they become vested.
PENSION BENEFITS
The Corporation maintains a defined contribution pension plan and defined benefit pension plans. The Corporation
does not provide any non-pension post-retirement benefits to employees.
Defined contribution pension plan
The Corporation matches employee contributions under the defined contribution pension plan. Under this plan,
contributions are funded to a separate entity and the Corporation has no legal or constructive obligation to pay further
amounts. The Corporation’s portion is recorded as compensation expense as contributions are made, which coincides
with the periods during which services are rendered by employees.
Annual Report 2023 | Stingray Group Inc. | 117
Notes to Consolidated Financial Statements
Years ended March 31, 2023 and 2022
(In thousands of Canadian dollars, unless otherwise stated)
Defined benefit pension plans
The cost of providing benefits under the defined benefit pension plans is determined on an annual basis by
independent actuaries separately for each plan using the projected unit credit costing method. Actuarial gains and
losses for both defined benefit plans are recognized immediately in full in the period in which they occur in OCI.
Actuarial gains and losses are not reclassified to the consolidated statements of income in subsequent periods.
Past service costs are recognized in profit or loss on the earlier of: (i) the date of the plan amendment or curtailment,
and (ii) the date that the Corporation recognizes restructuring-related costs.
The discount rate is applied to the net defined benefit asset or liability to determine net interest expense or income.
The Corporation recognizes the following changes in the net defined benefit obligation under operating expenses in
the consolidated statements of income: (i) service costs comprising current service costs, past service costs, gains
and losses on curtailments and settlements, and (ii) net interest expense or income.
The value of any defined benefit asset recognized is restricted to the present value of any economic benefits available
in the form of refunds from the plan or reductions in the future contributions to the plan.
(S) SHARE CAPITAL
Subordinate voting shares, variable voting shares and multiple voting shares are classified as equity. Incremental costs
that are directly attributable to their issuance are recognized in reduction of equity, net of tax effects.
Annual Report 2023 | Stingray Group Inc. | 118
Annual General
Meeting of
Shareholders
The Annual General Meeting will be held virtually
by videoconference on August 9, 2023.
Provisional calendar
of results
First quarter
of 2024
August 8, 2023
Second quarter
of 2024
November 7, 2023
Third quarter
of 2024
February 6, 2024
Fourth quarter
of 2024
June 4, 2024
Stock exchange
TSX : RAY.A and RAY.B
Transfer agent
TSX Trust Company
2001 Boulevard Robert-Bourassa
Suite 1600
Montreal, Quebec
H3A 2A6
Canada
1 514.285.8300 or 1 800.387.0825
help@astfinancial.com
www.tsxtrust.com
Glossary
of terms
Artificial Intelligence (AI): sometimes called
machine intelligence, is, generally speaking, algo-
rithms designed to make human-like decisions, often
using real-time data.
Over the top (OTT): Refers to film and television
content provided via a high-speed Internet connection
rather than a cable or satellite provider.
Audio Out-of-Home (AOOH): similarly to DOOH,
Audio Out-of-Home is a new category of Out-of-Home
(OOH) advertising developed by Stingray where
custom audio ads are inserted in music channels
broadcasting inside commercial establishments.
Connected TV: is a device that connects to — or is
embedded in — a television to support video content
streaming.
Digital Out-of-Home (DOOH): refers to a media
network of digital display advertising in commercial
spaces and public places.
Free Ad-Supported Streaming Television
(FAST): FAST channels are a new category of IPTV
content which consists of subscription-free linear
programming supported by advertising (requires an
internet subscription).
IPTV: Internet Protocol television (IPTV) is the process
of transmitting and broadcasting television programs
through the Internet using Internet Protocol (IP).
Pay TV: Television broadcasting in which viewers pay
by subscription to watch a particular channel.
Satellite TV: Television broadcasting using a satellite
to relay signals to appropriately equipped customers
in a particular area.
Subscription Video On Demand (SVOD): Refers
to a service that gives users unlimited access to a wide
range of programs for a monthly flat rate. The users
have full control over the subscription and can decide
when to start the program.
Video On Demand (VOD): A system in which
viewers choose their own filmed entertainment, by
means of a PC or interactive TV system, from a wide
selection.
4K UHD: Ultra-high-definition (UHD) television, also
abbreviated UHDTV, is a digital television display
format in which the horizontal screen resolution is on
the order of 4000 pixels (4K UHD).
stingray.com