Press Release Source: SIRIUS Satellite Radio
Sirius More Than Doubles Subscribers in First Quarter 2003
Wednesday May 14, 9:02 am ET
* Subscribers Up 127% Over Last Year * Brand Awareness Doubles Since Beginning of Year * 'Preferred Plan' of $6.99 for Additional Subscriptions Offered * 'Lifetime of Music & More Plan' Introduced at $399.99 * Financial Recapitalization Closed Resulting in Improved Balance Sheet and Liquidity * Company Releases First Quarter 2003 Financial Results
NEW YORK, May 14 /PRNewswire-FirstCall/ -- SIRIUS (Nasdaq: SIRI - News), the premier satellite radio broadcaster and only service delivering uncompromised coast-to-coast music and entertainment for your car and home, today announced that it more than doubled its subscribers in the first quarter of this year to approximately 68,000, meeting an important target for the second company to offer nationwide satellite radio service. The substantial growth in subscribers represents a 127 percent increase over its end-of-year 2002 figure.
(Logo: newscom.com )
"These excellent subscriber results indicate that we are beginning to see some traction in the marketplace," said Joseph P. Clayton, President and CEO of SIRIUS Satellite Radio. "With the introduction of our transportable 'Plug & Play' products from Kenwood and Audiovox hitting retail shelves this summer, we fully expect to exceed 100,000 subscribers this quarter, and reach our goal of over 300,000 subscribers by the end of the year."
SIRIUS also indicated that its brand awareness more than doubled since the beginning of the company's first brand advertising campaign in February of this year. These results were based on a category brand monitoring study conducted by Diagnostic Research and commissioned by SIRIUS.
With more subscribers signing up every day, SIRIUS is introducing a "Preferred Plan" for multiple subscriptions and a "Lifetime of Music & More Plan." On the "Preferred Plan," once a subscriber pays the initial subscription rate of $12.95, an additional subscription for that subscriber will cost only $6.99. On the "Lifetime of Music & More Plan," SIRIUS will charge a one-time fee of $399.99 that will cover the life of the satellite radio unit purchased.
SIRIUS also announced its financial results for the quarter ended March 31, 2003. SIRIUS launched its service nationwide on July 1, 2002, and had 68,059 subscribers on March 31, 2003. In addition, on March 7, 2003, SIRIUS closed a $1.2 billion recapitalization, which eliminated approximately 91% of the company's debt and 100% of its convertible preferred stock, and raised $200 million of new equity. SIRIUS currently has funds to cover estimated funding needs into the second quarter of 2004.
FIRST QUARTER 2003 VERSUS FIRST QUARTER 2002
For the first quarter of 2003 SIRIUS recognized total revenue of $1.6 million, compared to $33 thousand for the first quarter of 2002. SIRIUS reported a loss from operations of $(99.1) million for the first quarter of 2003, compared to a loss from operations of $(50.8) million for the first quarter of 2002. Adjusted EBITDA loss for the first quarter of 2003 was $(75.0) million, compared with $(36.2) million in the first quarter of 2002. Adjusted EBITDA loss for the first quarter of 2003 excludes a $256.5 million gain in connection with the elimination of approximately 91% of the company's debt.
SIRIUS reported net income applicable to common stockholders of $51.9 million, or $0.16 per share, for the first quarter of 2003, compared with a net loss applicable to common stockholders of $(90.1) million, or $(1.22) per share, for the first quarter of 2002. Included in net income applicable to common stockholders for the first quarter of 2003 was a $256.5 million gain in connection with the elimination of approximately 91% of the company's debt and a deemed dividend of $79.5 million associated with the elimination of 100% of its convertible preferred stock.
For the quarter ended March 31, 2003, average monthly revenue per subscriber, or ARPU, was approximately $10.94, including the effect of mail-in rebates.
(Selected Balance Sheet Data and Statement of Operations follow.)
SIRIUS defines Adjusted EBITDA loss as net loss before interest and investment income, interest expense, depreciation expense and debt restructuring. Our definition of Adjusted EBITDA may not be comparable to similarly titled measures of other companies in our industry. Adjusted EBITDA is not a measure of financial performance under accounting principles generally accepted in the United States. We have raised and invested large amounts of capital to fund the completion of our system; as a result, our results of operations include significant charges for depreciation and interest expense. In addition, we have recognized a gain associated with the restructuring of our debt. Adjusted EBITDA, which excludes these items, provides a basis to measure our operating performance, apart from the expenses associated with our physical plant or capital structure. Adjusted EBITDA should not be considered in isolation or as a substitute for operating loss, cash flow from operating activities or other measures of performance defined by accounting principles generally accepted in the United States. A reconciliation of Adjusted EBITDA loss is presented on the attachment.
SIRIUS defines average monthly revenue per subscriber ("ARPU") as the total earned subscription revenue and activation revenue over the daily weighted average number of subscribers for the period. ARPU is not a measure of financial performance under accounting principles generally accepted in the United States and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with accounting principles generally accepted in the United States.
SIRIUS Satellite Radio Inc.
Financial Highlights
(In thousands, except per share and subscriber data)
(Unaudited)
For the Quarter Ended March 31,
2003 2002
Statement of Operations:
Subscriber revenue, net of rebates $ 1,554 $ 4
Advertising revenue, net of agency fees 17 29
Other revenue 20 --
Total revenue 1,591 33
Operating expenses:
Cost of services:
Satellite and transmission 7,867 8,757
Programming and content 6,574 3,783
Customer service and billing 2,202 1,842
Sales and marketing 45,340 15,659
General and administrative 9,094 7,540
Research and development 4,983 7,713
Depreciation expense 24,100 14,481
Non-cash stock compensation 559 (9,024)
Total operating expenses 100,719 50,751
Loss from operations (99,128) (50,718)
Other income (expense):
Debt restructuring 256,538 --
Interest and investment income 1,343 2,000
Interest expense (18,665) (30,193)
Total other expense 239,216 (28,193)
Net income (loss) 140,088 (78,911)
Preferred stock dividends (8,574) (11,042)
Preferred stock deemed dividends (79,634) (171)
Net income (loss) applicable to
common stockholders $ 51,880 $ (90,124)
Net income (loss) per share
applicable to common stockholders:
Basic $ 0.16 $ (1.22)
Diluted $ 0.16 $ (1.22)
Weighted average common shares
outstanding:
Basic 327,785 73,861
Diluted 327,872 73,861
Reconciliation of net income (loss)
to Adjusted EBITDA:
Net income (loss) as reported 140,088 (78,911)
Add back non-EBITDA items included
in net loss:
Depreciation expense 24,100 14,481
Interest and investment income (1,343) (2,000)
Interest expense 18,665 30,193
Debt restructuring (256,538) --
Adjusted EBITDA $ (75,028) $ (36,237)
March 31, December 31,
2003 2002
Select Balance Sheet Data:
Cash, cash equivalents and marketable
securities $ 289,742 $ 173,702
Restricted investments 7,200 7,200
Working capital 263,268 151,289
Total assets 1,420,985 1,340,940
Long-term debt, net of current portion 58,205 670,357
Accrued interest, net of current portion -- 46,914
Total liabilities 117,744 772,941
Convertible preferred stock -- 531,153
Accumulated deficit (787,391) (927,479)
Stockholders' equity 1,303,241 36,846
Other Data:
Subscribers (end of period) 68,059 412 |
