Earnings Press Release
Press Release Source: XM Satellite Radio Holdings Inc.
XM Satellite Radio Holdings Inc. Announces First Quarter 2003 Results
Wednesday May 7, 8:23 pm ET
XM Surpasses 500,000 Subs in April; Launches March to a Million
XM Reduces Debt by $137 Million and Raises Additional $50 Million of Equity
GM Subs Hit 100,000; Other OEMs Announce Plans; Wal-Mart Roll-out End of May XM Introduces Family Plan, XM PCR
WASHINGTON, May 7 /PRNewswire-FirstCall/ -- XM Satellite Radio Holdings Inc. (Nasdaq: XMSR - News) today reported financial and operating results for the first quarter ended March 31, 2003. XM reports 483,075 subscribers as of March 31, 2003. This represented a net subscriber addition of 135,916 for the first quarter; a 39 percent increase from the fourth quarter 2002 and six times the subscribers from the first quarter of 2002. In April 2003, XM surpassed the half-million subscriber mark, commencing the Company's March To A Million subscribers campaign.
(Photo: Newscom: newscom.com )
First Quarter Financial and Operating Results
For the first quarter of 2003, XM recognized revenue of $13.1 million, an increase of $11.3 million when compared to $1.8 million of revenue in the first quarter of 2002. EBITDA loss for the quarter was $(63.3) million, an improvement of $12.1 million as compared with $(75.4) million in the first quarter of 2002.
For the first quarter 2003, the consolidated net loss available to common shareholders was $(124) million, or $(1.26) per share (on weighted average shares of 98.7 million), as compared to $(117.7) million, or $(1.56) per share (on weighted average shares of 75.2 million), for the first quarter of 2002.
XM continues to make progress towards cash flow breakeven while ramping subscribers, reducing costs and achieving operational milestones. Cost Per Gross Addition (CPGA) for the first quarter 2003 was $156 per subscriber, driven in part by seasonally lower marketing expenses. CPGA for the first and fourth quarters of 2002 was $875 and $240, respectively. During the first quarter 2003, XM incurred an average subscriber acquisition cost (SAC) of $74. This compares to an average SAC of $127 for first quarter 2002 and $96 in the fourth quarter 2002.
At the end of the first quarter 2003, the Company had cash on hand of approximately $194 million, excluding restricted cash, and approximately $122 million of undrawn credit and equity funding facilities from General Motors, resulting in an aggregate liquidity position of $316 million.
XM Eliminates $137 Million of Debt and Preferred Stock and Raises Additional $50 Million in Equity Proceeds
Since the first of the year, the Company completed several privately negotiated de-leveraging transactions reducing XM's debt and preferred stock by approximately $137 million in principal amount at maturity (the accreted value of the liabilities eliminated is approximately $108 million). These debt and preferred stock transactions eliminate approximately $212 million in total future principal, interest, dividends and liquidation preference amounts due over the life of the securities. In addition, warrants to purchase 3.7 million shares of XM stock at $3.18 per share were eliminated in similar transactions.
During the first quarter and in April 2003, XM also raised approximately $50 million in cash proceeds under its Direct Stock Purchase Plan (DSPP), and used approximately $17 million in connection with these de-leveraging transactions.
As a result of the various transactions described above, the Company increased its net cash on hand by an additional $33 million in cash, eliminated $137 million face amount at maturity of its debt, preferred stock, and warrants, some portion of which were convertible into approximately 5.9 million shares, and increased the Company's total outstanding common stock to approximately 120 million shares.
XM Expands OEM Distribution Channel
The Company achieved another significant subscriber milestone in the quarter when, working collaboratively with GM, XM surpassed the 100,000 GM subscriber mark where XM radios are factory installed in the new car. The XM OEM distribution channel continues to grow beyond GM to include manufacturers such as Honda, Acura, Audi, Toyota and Infiniti. Across the 2003 and 2004 model years, XM will be available in 15 automobile brands spanning over 70 vehicle models.
Acura, a division of American Honda Motor Co. -- a strategic investor in XM, announced that both the 2004 Acura TL and RL would include XM Radio as a factory-installed standard feature. The 2004 Acura RL debuted recently as the first luxury sedan to feature XM as standard equipment.
Toyota announced that XM Radio would be offered as a dealer-installed option on Toyota's all-new 2004 Camry Solara coupe, which will begin arriving in U.S. showrooms during the summer. Toyota has previously announced it will offer XM in its new youth oriented Scion brand. The Camry Solara coupe represents the first mainstream Toyota-branded model to move forward with XM.
Finally, Audi also announced that, beginning in the summer, it would offer XM as an option on a wide range of 2004 models, including the A4, S4, A6, the A8L and the allroad quattro. This XM product offering by Audi is particularly significant in that these award winning cars will arrive at the dealer with a factory-installed satellite-ready "head unit" and satellite radio antenna; the dealer will then "snap-in" the XM receiver on-site.
Wal-Mart Roll-out End of May
XM continues to expand its aftermarket distribution network to include 2,100 Wal-Mart stores across the country that will sell the complete line of Delphi XM SKYFi radios. This roll-out is expected to be completed by the end of May, as Wal-Mart outfits its automotive sales and home electronics departments with XM displays and stocks XM products across the nation. XM product availability at the world's largest retailer significantly expands the Company's existing national retail network of Best Buy, Circuit City and other regional and independent electronics outlets.
XM Family Plan
XM's Family Plan has already generated positive results from both current and new subscribers. To date, approximately 5,000 new radios have been activated under the XM Family Plan at a monthly rate of $6.99. A recent survey conducted on XM's behalf by Greystone Communications reported that 58 percent of XM subscribers are likely to purchase an additional XM subscription under the Family Plan.
XM Introduces New Product for the PC Market
In pursuit of the Company's "XM Everywhere" goal, XM has just introduced XM PCR, the first satellite radio product allowing any personal computer or laptop to be transformed into an XM radio receiver. XM PCR, with a suggested retail price of $69.95, is the perfect "music and news companion" for the PC user in the home or at the office. With its unique features and advanced functionality, XM PCR listeners can experience our rich programming content in digital quality sound without the buffering delays, reduced PC processing speed and heavy bandwidth requirements which characterize the Internet- delivered radio and music marketplace.
XM PCR is available for direct purchase from the online retailer PC Connection through XM's website at xmpcr.xmradio.com. |
