[Foreign Language] Good morning, everyone. Thank you for joining us on Stingray's conference call for the third quarter ending December 31, 2015.

Today, Eric Boyko, President and CEO, co-Founder; and Jean-Pierre Trahan, CFO, will be presenting Stingray's financial and operational highlights. Our press release reporting Stingray's third quarter results was issued this morning before the market opened.

Our press release, MD&A and financial statements for the quarter are available on our Investor website at stingray.com as well as on SEDAR. I will now give you the customary caution that today's discussion of the corporation's performance and its future prospect may include forward-looking statements.

The corporation's future operation and performance are subject to risks and uncertainties, and actual results may differ materially. These risks and uncertainties include, but are not limited to, the risk factors identified in Stingray's prospectus dated May 11, 2015, which is available on SEDAR.

The corporation specifically disclaims any intention or obligation to update these forward-looking statements whether as a result of new information, future events or otherwise, except as may be required by applicable law. Accordingly, you are advised not to place undue reliance on such forward-looking statements.

Thank you. I will now pass the call to Eric.

Eric?

[Foreign Language] Good morning, everybody. So let me provide you with some key financial and operational highlights from our third quarter of fiscal 2016.

During this quarter, we were quite active on the M&A front and completed 2 acquisitions for a total of 3 acquisitions since going public. We're also pleased with the results of the quarter, which once again showed continuous momentum in growth with most of our KPIs, so let me share with you 5 key highlights.

First, revenues increased by 24.6% to $23 million, and our adjusted EBITDA increased 14.6% to $8 million. These solid results reflect the contribution of acquisition, organic growth and also favorable exchange rate.

Second, international revenues. We're pleased that we've surpassed 40%, an increase of 35% that we had last year.

We continue to gain momentum in international markets via acquisitions and organic growth. As we indicated in the past, considering our push towards international markets, we expect that the international market will represent 70% to 75% of our sales in 5 years.

Third, we posted an increased recurring revenues of $19.7 million or 85% of our total revenues, an increase of 20% over last year. As you know, our revenues are mainly compromised of long-term contracts with a blue-chip client base.

Fourth, again, free cash flow. Adjusted free cash flow increased to $6 million, an increase of 60%.

The increase was mostly due to improved operating results, low interest rate and also a lesser degree, lower CapEx. Fifth, the board made a decision to increase our quarterly dividend by 17% to $0.035 for a total of $0.14 per year.

Our objective maintains to return cash to shareholders via dividend, representing approximately 25% of our adjusted free cash flow while supporting our aggressive M&A strategy. Coming back to acquisitions.

We continue to have a healthy pipeline of acquisitions of between 12 to 18 targets. During the third quarter, we completed the acquisition of DMD or Digital Music Distributions in Australia and iConcerts.

These acquisitions are expected to generate annual revenue and synergized EBITDA of approximately $9 million in sales and $4 million of EBITDA after synergies. In the first 9 months of fiscal 2016, the corporate invested $26.2 million for acquisitions, including contingent consideration.

Despite these acquisitions, our balance sheet remains solid, with a net debt of adjusted EBITDA rate of below 1.5. And if you -- if we look only at the debt that we have towards the banks, we're closer to 1.2.

So considering this low leverage ratio and strong cash flow, we have ample flexibilities to complete other acquisitions. The 3 acquisitions completed are strategic as they expand the corporation's foothold in Asia Pacific via Australia into high-end jazz and classical long-form music concert channels and also live music concerts.

With the acquisitions of iConcert based in Geneva, Stingray became the world's largest broadcaster of live music concerts on television, with access to the largest library of digital live music worldwide. The significant potential from this acquisition relates to substantial cross-selling opportunities with our existing customer base, which reached close to 400 million subscribers.

So following the successful recent launch of the VIBES feature on Stingray Music app in Canada, we recently enhanced the music experience of the Stingray Music mobile app for Pay-TV users in Latin America and the Caribbeans by adding the VIBES channels features there. The users of the free mobile app now have access to 1,500 channels in close to 100 genres created for every activity, mood and occasion.

Also on the mobile front, with regards to Stingray Music mobile app in Canada, we are extremely pleased to be growing level of penetration, considering its launch of TV subs in Canada and United States a year ago. We now have approximately 550,000 users in Canada being the largest market.

Over time, the Latin market has the potential to become the largest user base of our mobile app, and the addition of VIBES channels will further enhance the user experience. We are focused on building the right structure in sales to cross-sell our services, leveraging our reach.

We also remain focused on driving synergies from our last 3 acquisitions, which should begin to materialize in the second quarter of fiscal 2017. Now I will now return the call to our friend, Jean-Pierre, who will review the quarterly financials in more details.

Jean-Pierre?

Thank you, Eric. Good morning, everyone.

Before I begin, let me remind you that all amounts are expressed in Canadian dollars unless otherwise indicated. Stingray generated record revenues of $23.1 million in the third quarter, an increase of 24.6% compared with the revenues of $18.5 million a year ago.

The increase was primarily due to acquisitions, combined with growth in international markets. Revenues were also positively impacted by favorable exchange rates.

When compared with the second quarter of fiscal 2016, revenues increased by 1.1 -- $1.8 million, mainly due to acquisition and organic growth related to international market. Recurring revenues were up 20% to $19.7 million or 85% of revenues from $16.4 million.

When compared with the second quarter of fiscal 2016, recurring revenues, as a percentage of total revenues, decreased from 88% due to our larger contribution of installation and equipment sales in the Commercial Music business. Music Broadcasting revenues increased 22.4% to $17 million, mainly due to acquisition of DMD and iConcert that occurred in December 2015 as well as the impact of the Brava acquisition that was included in full in the third quarter 2016.

Commercial Music revenues rose 31.1% to $6.1 million, mainly as a result of the acquisition of Les Réseaux Urbains Viva, a new customer contract, which were all reflected in full in the third quarter 2016. Revenues generated in Canada increased 13.2% to $13.8 million in the third quarter, and international revenues were up 46.1% to $9.3 million during that same period.

International revenues were favorably impacted by organic growth related to additional Karaoke download store sales and music services, the favorable impact of the acquisition and the exchange rate between Canadian dollar and U.S. dollars.

Adjusted EBITDA was up 14.6% to $8 million from $7 million a year earlier. The increase was mainly attributable to acquisition of Brava, DMD and iConcert, organic growth in international markets and nonrecurring revenues from installation and equipment sales.

Adjusted EBITDA margin decreased to 34.7% from 37.7% a year ago due to higher selling expenses related to our international expansion. We also expect synergies from our recent acquisition to materialize in fiscal 2017.

For the third quarter, the corporation recorded a net income of $3.2 million or $0.06 per diluted share compared to $1.5 million or $0.04 per diluted share for the same period in fiscal 2015. The increase was primarily due to lower net finance expenses, higher operating results, partially offset by higher income taxes.

Adjusted net income increased 41.5% to $6.2 million or $0.12 per diluted share compared to $4.4 million to $0.13 per diluted share a year ago. The increase was due to recent acquisition, combined with international growth, additional sales from installation and equipment and lower finance expenses offset by higher income tax expenses.

Cash flow for operating activities was $6.2 million in the third quarter versus $5.4 million a year earlier. The increase was mainly due to acquisition and international growth.

Adjusted free cash flow increased 63.3% to $6 million compared to $3.7 million for the same period a year ago. The increase was mainly related to higher operating results, lower interest paid and lower capital expenditure.

Looking at our financial position, Stingray concluded the third quarter with a cash and cash equivalent of $2.5 million, and net debt position was 4.71 -- $47.1 million, including contingent consideration, resulting in a debt -- a net debt to last 12 months, adjusted EBITDA ratio of 1.5. I would like to point out that $30 million of the $47.1 million in total net debt are contingent consideration.

As of December 31, 2015, the corporation had $100 million revolving credit facility, of which approximately $63.4 million was unused, allowing it to pursue strategic acquisition to achieve this growth objective. I will now turn the call back to Eric.

Okay. So thank you, Jean-Pierre.

This sums up our conference call for today. Thank you for your time and attention.

I think we gave you some -- a lot of good results. At this point, Jean-Pierre and I will be pleased to answer any questions you might have.

And I think I'll leave it to Mathieu for follow-up questions.

Maybe a couple of housekeeping items just before moving on to more sort of strategic looking-ahead questions. Organic growth for the period.

I sort of calculated at around maybe low double digits, a little bit lower for music, a bit higher for commercial. Does that make sense?

Sort of low double digits?

Yes. I think it's -- we estimate about our organic growth between 5% to 7%, so I think so we're having good.

And also, we're pleased, we're seeing the cross-selling that we talked about, we just announced a nice little deal with Telenet in Belgium. So we're really seeing -- we're selling the Brava content to our Stingray Music client in Belgium.

We're seeing also some good cross-selling in the U.S. So we're excited about that, and we think that we'll be able to keep that number and even grow it.

So organic at around the 5% mark inside this quarter. If -- maybe for JP, if I look at FX, I know, obviously, you're getting the benefit of a very nice tailwind.

I don't think you gave any color on the last quarter. Do you want to give any particular color for this quarter as to what growth rates it might be providing you with?

Yes. So on the 7%, we said about 2% to 3% FX, 4% would be -- again, on the FX part, we have the advantage of selling when we sell in the U.S.

But again, in many countries, we sell in the pesos, in Mexico, so the peso went down. And the currency in Latin America also had moved, so we don't get the full advantage.

And Adam, don't forget that we pay labels in the U.S. Those are our big suppliers.

Absolutely. So Eric, I think more importantly, we head into the March 1 skinny basic packages.

It's only a few weeks away. Can you speak to your expected positioning in that dynamic?

Yes, that was interesting. So -- and this morning, we won BNN.

And again, we are going to be on every digital basic package, so we're being, like you say in English, we'll make whole. And that was part of the CRTC regulation.

And even -- and many operators, were going to be not included in the skinny basic, but were going to be with the skinny basic. So we're very happy, and there's no effect with any operator for us in Canada.

So we are make whole and even better than we expected.

Fantastic. And maybe just lastly, if you can just speak to some of the M&A queue.

Is it as robust as ever and, obviously, acknowledging that it takes some time to consummate some of these deals?

You know what, it's -- we still have a strong queue. We did it in the last 3 acquisitions, so right now we're a bit digesting them.

And right now in the market, we're even able to say -- we used to say, look, if you -- we'll do deals around 6x EBITDA. And right now, we're saying -- since we're very busy, we're saying -- before synergies, we're even saying closer to 5x EBITDA.

If you want to sell to us, we're looking to buy, before synergies, at 5x. So it's -- we're in interesting position for that.

And again, in many small countries, and you'll see there's some little Stingray Music hidden in all those countries.

First question is on the recent acquisitions and on digesting those acquisitions. I see that iConcerts was profitable in the quarter.

How is that integration of iConcerts going and how is it different from integrating DMD?

Yes, so 2 different companies. So iConcerts have offices in Geneva and Paris.

As you can imagine, the cost of living on the euro makes those both cities very expensive. It is our goal that all of those centers will be transferred to Amsterdam and Montreal.

So there's -- we have a lot of cost synergies with iConcerts in terms of personnel. We're talking -- there's not that many personnel there, but for sure, we're going to be centralizing in Montreal.

When you look at DMD Australia, it's a different picture, because in Australia, we only had 2 employees. In Australia, the savings is -- we are -- just by using our content instead of using the content in Australia and using our servers instead of using the satellite, we have savings of $800,000 to $1 million a year.

So we're not cutting anybody there. And that will bring our EBITDA right now -- we bought at 5.5x EBITDA, and that will bring it to closer to 4.24x EBITDA.

So a lot of our deals with the synergies are made by changing the servers and using our content from Montreal. And changing those servers will take us anywhere from 3 to 5 months.

Okay, great. That's helpful.

So DMD being in Australia and you had your recent partnership Multi Channels Asia, when you look at the Asian market, how do you break it up in terms of regions? And what opportunities -- what do you see as the opportunities in the near term?

Yes. So very interesting for us that these 2 acquisitions, now we do $10 million of sales.

On a pro forma basis, Stingray is about $100 million of sales. So now $10 million of sales that we do in Asia, for Asia -- for us is 10% of our sales.

Excited about that. We work with close to 30 cable operators.

iConcerts gave us key markets. iConcerts, we have agents in Korea, Japan, India, China and Russia.

And again, surprisingly but well, the Chinese in the China markets, we get paid in U.S. dollars, they pay us in advance.

Russia, we get paid well. Korea is good.

Japan is good. So these are key markets that we want to expand.

And just in China, we supply them very limited concerts, and there's good demand to really increase our position there. So we're very excited about the Asian market and how we can cross-sell our other of products.

Okay. And are these agents -- iConcerts agents throughout Asia, are they now educated in the Stingray core offering?

Are they going to be selling that? Is that going through other channels?

No. That's the process.

So for us, our biggest opportunity, and we're seeing it. Like I was saying before to Adam, like we were happy we sold Brava to one of our Stingray Music customers, Telenet, in Belgium.

So we got this great deal there. We're selling the Slow TV right now to AT&T in the U.S.

We're even going to be bringing Brava and jazz to the U.S. and some other markets.

So we're just -- we've also efficiently working hard, we booked [ph] entry in France. So we're really seeing the cross-selling.

I know cross-selling is the magic word in every company, but that, I think, is going to be interesting, what we can do in the next 12 months and deals that we can announce.

And do you have a metric on how much video is of your revenue today versus a year ago?

Video, meaning, long-term video?

Yes.

Good question, I'll get back to you, but top of mind, I'd say about 10% to 15%. So still very small.

Okay. And then just a follow-up question for JP.

JP, I guess, EBITDA margin is in the mid-30s, 30% range, reflecting recent investments in building the acquisitions in Asia. Can you get back to the 40% EBITDA margin of 2 years ago?

And if so, how do you get there?

As long as the commercial business equipment sales increase, so the margin will -- could move a little bit, of course. And that's -- I'm going to do the budget this month, so -- of course, and the forecast, but we expect to keep the same kind of margin for the future.

And this quarter, we had -- we sold -- we had a big deal with Sports Experts Forzani. We did the store of the future with them, and that was launched in October, November.

So for sure, we had a lot more equipment sales than we usually have. It's a great project.

We're very happy to be the partner of the store of the future for Forzani, but we expect the margins to grow.

Okay, great. And in terms of the OpEx, $12 million range, is that a reasonable run rate for the coming year?

Yes, of course. And of course, we're going to have some new people to increase the team to make sure that all the acquisitions are integrated.

But we're going to keep the same percentage.

Eric, you alluded to it that you, I guess, you've expressed a more conservative target multiple on acquisitions. But given the volatility in capital markets globally, can you talk a little bit about how that is impacting the conversations you're having with potential sellers.

Is that helpful to you? Or is it making people more nervous out there?

No pressure. Like I said before, since we have a strong pipeline and since the markets are tough right now, the capital markets, we're able to decrease the price that we pay for assets.

We were looking at 6x EBITDA and now we brought it down to 5x EBITDA before synergies. And we are very open to people that want to sell to say that's our new range, that's our new metric.

So if you want to sell at 5x, great. If not, no, let's wait for the next bus.

And also we're -- yes, we're in a nice position right now. We're in a nice position.

And also we're very busy with the last 3 acquisitions. So it's not like we're in a rush to do another one in the next month.

Even if it's still going to be coming in, the tuck-ins. But -- so we're in a nice position to be patient.

And choose.

And choose them.

Are you seeing any competitive bidders emerging? I know in the past, you seem to have been the only buyer out there.

Is that -- so far, is that staying the same?

Exactly -- no, a lot of the deals we do are small companies that don't have the scale, and we are the logical synergy buyer. So because of that situation, we've never seen another player.

We've never been in the process, like an official process with these small tuck-ins.

Okay. Just switching over to the commercial side.

I mean, you've won some really nice contracts there in growing the business. Can you talk a little bit about what the outlook is there?

How you're approaching that business? And is that a footprint that you want to expand globally?

Or do you want to stay more primarily Canadian on that side?

Yes, so for sure, we're now -- the commercial business is the 74,000 locations we have in Canada and in that business right now, we signed a lot of deals, like [indiscernible], which is Bell stores and Forzani. And we're seeing 10% organic growth in that division.

And again, we have very strong pipeline of new clients. So we're very excited about that.

And we've also launched an affiliate market in Mexico where we have 2,000 locations. So in that market we don't have the Mexico experience, so what we do is we sell our technology to our affiliates in Mexico and Latin America for a fee.

And they resell it, they are resellers. So we're not responsible of going to see McDonald's and every [indiscernible] store in Mexico City.

So we're looking to launch these affiliate programs in Latin America and Europe and in Middle East. So we're happy about the test that we're doing in Mexico City.

And lastly, a question for JP. On the access to capital side, have -- how are the -- how is the relationship with the banks going once again in the context of some fairly volatile capital markets out there?

Do you still have access to capital in content? And are you confident that you can access that if bigger opportunities to arise?

Yes. We have very good relation with the banks, the 4 banks, and everything is very fine.

I don't see any problem with that.

And again on a positive note, a lot of our investors are cash-rich now, because Rona got sold for $3.2 billion [indiscernible] will have a lot of cash for us. It's deployed.

Just maybe one more. We now have the 9-month results, so we can sort of go back to the 4Q '15 numbers.

And when I look at the music programming line, that's the cost of services, content also, it shows about 36% of revenues, which is, I guess, relatively high versus the other quarters of the year. Just curious if that's something we should be thinking about as we look into the 4Q '16 or it's just what it is and there's some timing issues during the course of the year.

You're talking about the programming content line?

Yes.

At our discussion with the team, it's our first public year. We need to do some re-classing between G&A and programming just to make sure that all the people are in the right place.

But we don't -- I don't think we see the same kind of level of total expense of all the department together. We don't see [indiscernible]

Yes. And our margin -- our broadcasting margin and our commercial margins, the more we go international, the margins on these international markets are higher than in Canada and the U.S.

So -- and Brava and jazz, because it's -- a lot of them is -- a lot of the artists are -- they become what you call public domain. We pay lesser rates on public domain than we pay on new artists.

So the margin should maintain or improve. So -- but there are some accounting on how we account for content and legal and so we have to adjust for that.

Yes, we're talking about that a lot these days.

Yes. That was -- I mean, obviously, that's a different line item or 2.

I was sort of more looking at how that music programming line progressed during the course of the year, where we saw some year-over-year elevation in the 1Q, 2Q, a slight decline in the 3Q. But the implied number is about 36%, 4Q '15.

And again, I was just wondering if there was something unusual, but it doesn't sound as though there is.

The only unusual stuff is our product mix, and we did more equipment than labor this year than last year. Because, absolutely, as you know, on the commercial side, we're entering into the digital signage.

And digital signage is great revenues, great RMR. But it's also a lot of -- you've got to set up TV screens, so there's a lot of equipment and labor.

And we don't make -- as you can imagine, our margins on equipment and labor are around 30%, so it's not the same as music or the RMR.

Eric, I guess, one question that wasn't asked today, it's usually asked. Just any update on how the mobile offering is evolving.

Any additional progress traction among subscribers?

So in Canada, like we said, we hit 550,000 mobile subs. And we did a survey, 9% of our listeners are using the mobile application.

So an incredible stickiness even to the point that we have so much volume on it that we're thinking of maybe getting some advertising/sponsorship on the mobile app, because the numbers are significant. We're excited about Latin America.

The beauty about Latin America, there's no Spotify and there's no Pandora and there's no real competition in that market. So Stingray Music is becoming the #1 streaming music provider for LatAm.

So we enjoy that, and we have a strong presence. And even in Canada, we're looking to do surveys, marketing surveys.

We feel that Stingray Music, in terms of streaming, might be the #1 streaming music service in Canada. So again, we're going to do some surveys on it, but we feel that we might be in the #1 position.

And let's not -- we are very happy. I shouldn't say that, it's not happy, but good news, bad news.

But with the exit of Rdio in the Canadian market and the exit of Songza, those were 2 big competitors. So we're very happy that they're gone, and a lot of people are coming to our app.

So for us, it's very good news.

I guess, just to follow on Adam's question and your comments on the competitive front. Eric, you guys have a slightly different or unique view of the music industry.

And I want to ask you about how you think about diversification of other aspects in the music business. We've seen Pandora get into things like ticketing, and Corus recently announced they're getting into live events or country music.

How do you look at these aspects of the music industry? Is that something where you want to go one day?

Or is it somewhere you prefer to stay away?

The beauty about Stingray, if you look at Stingray, we are able to be a global provider, and we're also a very -- an effective low-cost provider of music and concerts and videos worldwide. And with the launch of -- that we're doing with iConcerts and with Brava, for us, everything is electronically done and curated from Montreal.

And we're one of the biggest curators in the world, we have 100 people. But for us to curate an audio list or to curate concerts back to back or music videos is the same thing.

And in terms of technology, once the computer does the distribution, so we have that main advantage. So we want to continue to be deemed as a provider for all B2B companies, mobile, cars, airlines and TV around the world and to be the most efficient at doing this and with the best curated music in the world.

That's our main focus.

Yes, excellent. I appreciate that.

And then, I guess, early in the call, you talked about -- I think you briefly mentioned cross-selling that you've been doing in the U.S. market.

I was wondering if you could quickly elaborate on that and what's going on in the U.S. market in general.

We're seeing a lot of demand for some of our products like Brava and jazz with many cable operators. So there's a lot of demand for -- and also some demand for the 4K Ambiance.

As you know, the Ambiance channel with the Slow TV or the fire log, we were the first 4K channel to launch in North America. Every operator now, including Rogers, Bell, Telus, Videotron are launching 4K.

Same thing in the U.S., Comcast, AT&T, all the big guys. So because we're the first one, we have a lot of demand for that content.

So we're excited about that. For sure, these are not the $3 million, $4 million, $5 million deals.

But again, we're selling more products with the same customers and increasing our ARPU per sub.

Okay. Thank you very much for joining us on this conference call this morning.

We look forward to speaking with you again following the release of our fourth quarter results. Have a great day.

[Foreign Language]