Thank you, Jonathan. [Foreign Language] Thank you for joining us on Stingray's conference call for the fourth quarter and fiscal year ending March 31, 2016.

Today, Eric Boyko, President, Chief Executive Officer and co-Founder; and Jean-Pierre Trahan, Chief Financial Officer, will be presenting Stingray's financial and operational highlights. Our press release reporting Stingray's fourth quarter and fiscal year results was issued this morning before the market opened.

Our press release, MD&A and financial statements for the quarter are available on our Investors website at stingray.com and on SEDAR. I will now give you the customary caution that today's discussion of the corporation's performance and its future prospects 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 Annual Information Form dated June 16, 2016, 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're advised not to place undue reliance on such forward-looking statements.

Thank you. [Foreign Language] Eric?

Okay. Good morning, everyone.

Before I provide you with the key financials and operational highlights of our fourth quarter of fiscal 2016, I'll give you a summary of our fiscal year as a whole. I'm very proud to say that we completed our first fiscal year as a public company with several accomplishments to report and on track with our goals.

Based on our fourth quarter results, we now have reached the $100 million mark in terms of revenue run rate. As indicated in the past, scale is important for our business model, and this is an important milestone.

Also based on fourth quarter results, the contribution of international revenue represents close to 50% of our sales, and Asia reached 10%. In a short period of time, we have done a fantastic job at expanding from our core Canadian market to a truly international play.

As planned, the use of proceeds from the IPO has allowed us to intensify our acquisition program. During the past fiscal year, we have been active on the acquisition front, with 4 acquisitions representing investments of $24 million excluding earnouts.

The acquisitions have a pro forma adjusted EBITDA of $6.5 million with synergies expected in the upcoming quarters and significant cross-selling opportunities to be leveraged. As you know, acquisitions are integral part of our business model, and we have undefined many other opportunities.

However, it's important to highlight the contribution of organic growth on a consolidated basis from our international market segment supported by new product and cross-selling opportunities related to acquisitions. For the past fiscal year, we estimate our organic growth rate at 4%.

This growth should alleviate some of the concerns related to our capacity to grow organically. In the future, we are confident in our ability to maintain an international growth rate in the mid-single-digit range.

Good. Let's go to the fourth quarter results.

First, in the fourth quarter, revenue increased 30.6% to $25.7 million and adjusted EBITDA increased 6.3% to $8.2 million. These solid results reflect the contribution of acquisitions, combined with significant growth in international markets, the launch of new products and also the favorable exchange rate.

Second, international revenues represented 47.4% of total revenues, an increase of 88% over last year. We continue to gain momentum in the international market via acquisitions and organic growth.

Considering our push towards international market, which represent most of our future growth opportunities, we expect that international revenues will account for 75% of our total revenues within our 5-year time frame. Third, we posted increased recurring revenues of $21.9 million or 85% of total revenues, representing an increase of 27% over last year.

In the Music Broadcasting business, our revenues are mainly compromised of long-term contracts of 3 to 7 years. Fourth, and we love cash flow, so adjusted free cash flow increased to $6.3 million compared to $5.4 million last year.

Our main strength is our ability to convert our adjusted EBITDA into free cash flow. Our Q4 adjusted free cash flow increased to 70% -- 77% of our adjusted EBITDA compared to 69% last year.

The increase was mainly related to improved operating results, lower financial costs and partially offset by higher CapEx. Briefly, coming back to acquisitions.

We continue to have a healthy pipeline of acquisitions, and we currently have opportunities to acquire businesses at lower evaluation parameters in the range of 4 to 5x EBITDA, and we can discuss the 4k acquisitions of yesterday later. During the fourth quarter, we completed the acquisitions of Nümedia.

Our decision to acquire Nümedia was primarily based on its impressive and diverse client list. This acquisition creates significant operational synergies with the Stingray commercial business, which operates in over 74,000 locations across Canada, including ALDO shoes, TD Trust, A&W, Sports Experts, Sobeys and Canadian Tire.

As I mentioned before, the corporation invested $24 million for acquisitions, excluding contingent consideration, in fiscal 2016. Despite these acquisitions, our balance sheet remains in solid position, with a net debt to adjusted EBITDA of 1.03 if we include the earnouts, so we have a good balance sheet.

Considering this low leverage ratio and strong free cash flow, we have ample flexibility to maintain an active acquisition program. The successful launch of the VIBES feature on our Stingray Music App is continuously being enhanced to improve the music experience of Stingray.

The music mobile app for Pay-TV users. The users of the free mobile app now have access to 2,000 channels and close to 100 genres for every activity, mood and occasion.

With regards to the Stingray Music App user base, we are extremely pleased by the growing level of penetration. For example, in Canada, we now have a penetration rate of approximately 8% of Canadian households.

On May 2, 2016, we announced the expansion of our distribution deal with Comcast to bring thousands of new music selection to Xfinity On Demand platform. Furthermore, the transition from analog to digital cable allows us to fully leverage our technology digital leadership, and this was an important consideration in the decision-making process of this client.

Also yesterday, we announced the acquisition of Festival 4k, the first channel in the world to broadcast nonstop and native 4k UHD with hundreds of hours of live performance, including festival, concert, circus shows and theater production. With the investment being made by operators worldwide in 4k, we believe we can quickly build a strong distribution with a global footprint.

In conclusion, we are focused on building the right strong structure to cross-sell our services, leveraging our reach. We also remain focused on driving synergies from our last 12 months acquisition, which should begin to materialize in the second quarter of fiscal 2017.

So we enter the new fiscal year with great confidence, considering a well diverse business, our scale, our solid balance sheet and many opportunities to grow through acquisitions and organically. Good.

Before I turn the call over to Jean-Pierre, let me briefly address a notice of complaint received on June 7, 2016, alleging infringement of 4 distinct patents filed by Music Choice. Stingray has been advised by patent council that Music Choice patents are invalid, subject to revocation and simply not relevant as Stingray distribution platform in the U.S.

does not use technology as alleged. Stingray asserts that the complaint filed by Music Choice is a desperate attempt to protect its slipping market share, and given its market position, is likely anticompetitive.

Stingray will address issues via the appropriate legal and regulatory channels. Still, Stingray will not be intimidated by any current provider and will continue to lawfully gain market share in the United States by offering innovative products, great content and competitive pricing.

We also -- we anticipate that proceedings and our counterclaims may put Music Choice at play and provide an opportunity for a future transaction. Jean-Pierre, I'll let you discuss the quarterly results.

Yes, 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 $25.7 million in the fourth quarter, and an increase of 30.6% compared with revenues of $19.6 million a year ago.

The increase was primarily due to acquisitions, combined with significant growth in international markets as well as the launch of new products. Revenues were also positively impacted by the favorable exchange rate.

When compared with the third quarter of fiscal 2016, revenues increased by $2.6 million, mainly due to acquisition and organic growth related to international markets. Recurring revenue were up 27.6% to $21.9 million or 85% of revenues from $17.1 million.

When compared with the third quarter of fiscal 2016, recurring revenues as a percentage of total revenues remained the same at 85%. Music Broadcasting revenues increased 38% to $19.4 million, mainly due to the acquisition of Brava, Digital Music Distribution and iConcerts that occurred in fiscal 2016.

Commercial Music revenues rose to -- 11.8% to $6.2 million, mainly as a result of nonrecurring revenues from installation and equipment sales. Revenues generated in Canada increased 2.3% to $13.5 million in the fourth quarter, and international revenues were up 88.3% to $12.2 million during the same period.

The increase in international revenues were mostly due to acquisitions, international organic growth and the favorable impact of the exchange rate between the Canadian dollar and U.S. dollar.

Adjusted EBITDA was up 6.3% to $8.2 million from $7.7 million a year ago. The increase was mainly attributable to the recent acquisition as well as organic growth in international markets.

Adjusted EBITDA margin decreased to 32% from 39.3% a year ago. The difference is mainly due to nonrecurring positive, last year, including rights reversal.

We expect our margin to improve particularly over the next 3 quarters, with the achievement of synergies from the acquisition and be back to our target of 35%. For the fourth quarter, the corporation recorded net income of $3.2 million or $0.06 per diluted share compared to $1.9 million or $0.06 per diluted share from the same period of fiscal 2015.

The increase was primarily due to higher income taxes, recovery related to the recognition of prior tax losses, lower finance expenses, offset by a change in fair value of investments. Adjusted net income increased 35.6% to $7.1 million or $0.14 per diluted share compared to $5.2 million or $0.15 per diluted share a year ago.

The increase was mainly due to acquisition, combined with this signing of a new international contract and higher income tax recovery. Cash flow from operating activities increased to $7.7 million in the fourth quarter versus $1.3 million a year earlier.

The increase was mainly due to higher operation -- operating results and lower net exchange in noncash operating items. Adjusted free cash flow increased to $6.2 million compared to $5.4 million for the same period a year ago.

The increase was mainly related to higher operating results and lower financing costs, partially offset by higher capital expenditures. Looking at our financial position, Stingray concluded the fourth quarter with a cash and cash equivalent of $3.2 million.

Our net debt position was $44.1 million, including contingent considerations, resulting in a net debt to last 12-month adjusted EBITDA ratio of 1.4 or 1.03, excluding contingent consideration. I would like to point out that $12.3 million of the $44.1 million in total net debt are contingent considerations.

As of March 31, 2016, the corporation had $100 million revolving credit facility, of which approximately $65 million was unused, allowing it to pursue strategic acquisition to achieve its growth objective. I will turn the call back to Eric.

Okay. Thank you, Jean-Pierre.

Thank you, everyone, for your time this morning. And we're open for your questions, Jean-Pierre and I, and happy again, with our first year results as a public company.

So I'll let you guys start.

So in the MD&A, there's disclosure that the 4 acquisitions of fiscal 2016 generated about $6.9 million. And I know Eric, you're trying to do about $5 million to $10 million of EBITDA post synergies as a result of acquisitions each year.

So maybe you can speak a little bit in terms of how you see these revenues ultimately scaling to certainly help drive perhaps $5 million-ish of related EBITDA post synergies pursuant to these F 2016 transactions.

The 4 acquisitions we did last year, our cash that we deployed was $24 million, with the earnout is $33 million. And we expect those 4 acquisitions to generate pro forma $6.5 million of EBITDA.

So we're roughly -- we're roughly post synergy at below 4x EBITDA.

Fantastic. You're always fast, but I got it.

That's very helpful. Let me touch on something for you maybe and/or JP.

These are small numbers admittedly, but just maybe a bit of nuance would be great. So Canada was up about $300,000 in the period.

Commercial, which usually skews heavily to Canada, was up about $600,000. So I don't want to suggest that there was a pullback in Music Broadcasting in Canada, which tends to be relatively stable, but maybe you can just speak to some of the Commercial Music activity outside of Canada and highlight again what you saw in the Music Broadcasting inside in Canada in terms of stability.

So in terms of -- the broadcasting business in Canada is stable and even growing slightly. The only decrease we had last year is one of our MSOs or cable operators had more commercial accounts than they estimated, so that was about an effect of $400,000.

So we get more money from a commercial account from a cable operator than we get from a residential. So it was really a one-off mistake from one of our operators, which affected our revenues.

If not, if you take out this one-off, our subscribers year-over-year are flat and even, we were surprised in April -- in March, April after the pick and pay, we had an increase of 50,000 subs or 0.5%. So maybe it's still early, but it seems that the pick and pay was not only negative but it was positive in our case.

Eric, JP, I want to dig in more on the EBITDA margin. It pulled back a little bit this quarter.

Perhaps can you give us some more color on what happened there with the rights and rights reversals? What portion of this is coming from OpEx?

Maybe some more color on why it's coming down and what gives you confidence it can come back up.

If you look at our -- if you look at the 8 and you'll see in the annual report, over the last 8 quarters, we went from Q3 last year $6.9 million, Q4 last year $7.7 million adjusted EBITDA down in Q1 this year to $7.1 million. So when we did the IPO, going public and everything else, we had some rights reversal that were positive in Q4, so it was like onetime positive so it doesn't follow our run rate.

So we had about $500,000 or $600,000 of these one-offs. So our EBITDA margin last year should have been closer to 36%.

This quarter, we're at 32.5% and we have roughly $3 million to $4 million of synergies, $3 million to $4 million of 100 million sales, 3% to 4% so we expect to be above 25%, which is our target and also to maintain 75% of our EBITDA and free cash flow, which we're now at 77%. So with the synergies -- so best example is we bought iConcerts in December, so iConcerts has offices in Geneva-powered satellites.

So those costs were not eliminated in January, February, March. So we will need 2 to 4 quarters to emulate the position, close down the offices and redirect the satellite.

And all these synergies are identified I believe so. It's on the plan.

This is what we expect.

Okay. Okay, okay.

Because when you gave your number of $24 million in acquired revenue and $6.5 million in adjusted EBITDA pro forma expected, the implied margin there is 27%. Is there a structural change in EBITDA margin for your business as you expand internationally, or as you add more video to the business?

No, we expect to -- and you'll see, the 4k acquisition we did yesterday, we paid $1 million cash up front. I’m giving numbers round.

$1 million earnout, so it's going to be $2 million transaction. We expect that deal next year to generate close to EUR 1 million.

So that deal will be at 2x EBITDA. So once we get the scale, our margin will increase.

So on the 4k Festival side, we expect the EBITDA margins to be at 50%. And the deals coming forward now that we have in our pipeline, our EBITDA multiple after synergies are even better than expected.

So we see an increase of our margins coming over the next 12 months, our EBITDA margin.

Okay. That's very helpful.

And then perhaps maybe one more big picture question on the strategic side of things, Eric. You're adding more video to the business.

Can you tell us how you look at adding linear video versus channels versus video-on-demand services? And perhaps broadly speaking, what's the next segment after this?

How does mobile look in terms of stand-alone mobile operators? And how are you looking at that market in terms of growth opportunity in the next year?

Yes. So the video channels, which we didn't have when we did the IPO, we added in the last year.

We added the Brava, classical, we added jazz, we added concerts. So those for us are new channels, better cross-selling.

And for sure, the integration of those channels in turn is going to take us 3 to 6 months, or going to take us 12 months. So by September of the year, we should be fully integrated, which will leave us the opportunity to buy a lot of new channels like the 4k and integrate them very quickly.

So we're excited about that. On the mobile side, look we're -- our penetration in Canada is good, and we are looking to do mobile-only deals.

In the mobile industry, if you asked a mobile operator 5 years ago, if they want to have Stingray Music App, they would have said, "How much are you going to pay me to be on my phone?" If you would have asked 2 years ago, the mobile operator would've said, "Okay.

Let's do a white label." And for the first time now, we see the trend of the telcos investing in content for mobile.

So the same deal we did with Vidéotron in Quebec, where we have a mobile-only deal. We have many opportunities worldwide.

U.S., Caribbean, LatAm and Europe of mobile operators ready to pay for content for their, again, over-the-top mobile-only customers.

Okay. And then just to be clear on the video side, you're okay with both linear video broadcast and video on demand?

Absolutely.

Are you guys concerned about cord cutting and acquiring broadcast channels...

No, very interesting. We just got on Monday this week, we got the -- we have the annual report of the where the TV businesses going worldwide.

And right now, there's 842 million TV subscribers, growing over the next 3 years to 960 million, so the Pay-TV market worldwide is growing. So -- and again, like I mentioned before, we had an increase of 50,000 subs in March and April.

So the pick and pay effect, but the only reason for that we might see again, because we're only on digital, maybe some analog customers decided to become digital subscribers so that's why we had a gain on the music side. So we're not seeing the cord-cutting on the digital side, I'm not talking about analog.

We're not seeing it on the digital side.

I was wondering if you can maybe break down the 31% revenue growth by organic, FX and acquisition.

Yes, so roughly we won't -- on the FX part, there’s so many up and down and went so many countries, well, roughly what we said is 4% organic, 27% acquisition. So 4% and 27% total, including...

I think so. On a constant currency basis, the 4% organic, is that on a constant currency basis or including currency fluctuations?

For now, I would keep it on constant currency. I will keep it simple.

That will be the answer. It's special, so when the U.S.

dollar goes down, which is good for U.S. customers, we have more business in Mexico and the peso went down.

So there's like a natural edge with the currency going up and down. And since we're in 152 countries, you can imagine the complexity of all the...

We win, we lose.

Exactly.

I'm sorry, I did not hear what was...

Because the U.S. dollar goes down and the pesos goes -- because U.S.

dollar goes up and pesos go down, we win and lose with different currencies. So I would say, right now, the FX impact on revenues for sure is positive but on the EBITDA basis, it's limited, not material.

All right. All right.

Now in terms of your quarterly dividend, how we should look at the dividend policy rate going forward? Which instance, is it going to be reevaluated on an annual basis?

And what's the basis of payout? What kind of payout ratio you're trying to stay in?

So when we did the IPO payout ratio was at 25%. We are looking and the board is looking at maybe increasing that payout ratio.

We increased the dividend by $0.005 and we expect to increase the dividend every second quarter. So we expect that the next quarter to increase it by another $0.005 or $0.02 per year.

So we start at $0.12, we’re at $0.14 and let's be in all of the -- let's be straightforward here. Management owns 22% of the company and we're very motivated by dividends, and we see dividends as quarterly bonuses so it's one of the -- for us, the more free cash flow we generate, the more we can increase the dividend, and it's one of our #1 KPIs.

Okay, perfect. And in terms of your acquisition funnel, you continue to have a nice steady acquisition announcements coming in through.

But can you talk a little bit about the funnel as it stands right now compared to last year? Is it bigger, smaller multiples that you're looking at versus last year?

How is the M&A market right now?

So the -- our funnel is still very good, very strong, and we feel that we might be -- like we always -- when we did the IPO, we said we're going to generate more than $5 million of incremental EBITDA with our acquisitions. And we're very confident that we'll achieve that this year.

Our funnel is in good position. Yesterday, we announced the deal with 4k.

The 4k channel will, in the next 12 months, generate about EUR 2 million in sales and EUR 1 million EBITDA, so at 50% margin. So that's one of the acquisitions and we're very comfortable.

And to be straightforward, the value of our deals, the EBITDA value we're going to see over the next 4 deals are getting better. So we're really in a scale position, so it's interesting.

The contribution you have are -- because of your breadth and presence in Europe right now is bigger. So just terms of the timeline for the recent legal announcement that was made, do you have any timeline at this point in time, when it comes to what's the next data point, we should be looking for?

Yes, so we -- I think I'm an accountant. I'm not a legal officer but I think we have about 60 days to respond to it.

We're going to be earlier than that and like I mentioned again, we see this case as a potential for making a play on Music Choice. And we feel they might have overstretched themselves, management team of Music Choice, so in the next 30 to 60 days will be our proceedings.

Great. And one last question for me.

The U.S. market, we've seen you gain ground nicely in the U.S.

Can you talk a little bit about the opportunities you have organically beyond potential M&A that you could do? Are you looking at expanding or entering new relationships?

What's the focus?

So in the U.S. and this we’ve -- when we did investor meetings, so we've always been very straightforward.

In the next 12 months, the companies that are -- the contract will renew, you've got DirectTV, Dish, Cablevision, Suddenlink and even Charter and Time Warner. So a lot of deals are coming up.

The U.S. market is our #1 market.

We only have 6 million subs out of 100 million subs. So it's our #1 focus.

And then even with the proceedings right now, we're still aggressively pursuing those accounts on an organic basis. And as you know, we have the scale.

We don't have -- we've got the scale and the OpEx so in technology-wise, content-wise, and pricing-wise we have a net advantage.

Okay. And sorry I forgot one last question.

As you continue your M&A strategy and you probably mentioned that in the past. How much additional administrative costs and management costs should we assume in our model so that you can support better your operations that are growing worldwide?

When you look at the EBITDA margin as you mentioned, we should expect to see margins improve as you do these acquisitions. But is that -- does that include the cost of having a more strengthened management team across multiple geographies?

Our biggest challenge for Stingray is to develop an international sales team. So we have to decentralize the office in Montreal to our office in Amsterdam, in Miami.

We've also officially launched. We're launching an office in Singapore in September 1 to take care of Asia, so we have to be able to decentralize.

So it's not a matter of cost. The cost, incremental costs are minimal, but it's a matter of getting the cross-selling, getting the information and to be able to decentralize our structure for Montreal.

So that's one of our challenge as a management team, so we don't expect much more admin or OpEx, we see again, our EBITDA margins increasing.

Just quickly back to the U.S. market opportunity and the lawsuit.

Not sure how much detail you can give here. But you mentioned several service providers that are potential opportunities for Stingray.

What's been their initial reaction to the lawsuit? Did they pay attention to these types of things?

Has it been the topic of discussion? Or did they largely ignore these?

We spoke to our customers you can imagine and right now, they see this the same way that investors and you see it, and they see it's very immaterial. So there's no real effect.

There's no -- for sure, it muddies the water a bit, but the initial reaction has been very favorable. So no real impact on that side.

And do you think that this would cause them to pause their strategy going forward in terms of the audio service or upgrading their audio services?

The only word -- the one common word that we got from every partner and cable operator in the U.S. was that they felt that Music Choice was desperate.

So that was the keyword, desperation.

Thank you very much. This sums up our call for today, and we thank you for joining us and look forward to speaking with you again following the release of our first quarter results.

Thank you very much.