National, November 15, 1999 -- XM Satellite Radio (NASDAQ:XMSR), an innovator in radio entertainment, today reported financial and operating results for the third quarter ended September 30, 1999. XM will use direct satellite-to-receiver broadcasting technology to provide listeners in their cars and at home with crystal-clear sound seamlessly from coast to coast.
Third Quarter Financial and Operating Results
The company reported a third quarter operating loss (EBIT) of ($9.4) million and a net loss of ($17.4) million, or ($2.60) per share, as compared to an operating loss of ($3.9) million and a net loss of ($3.9) million, or ($0.58) per share, for the 1998 third quarter. The net loss for the quarter was impacted by a one-time ($5.5) million charge related to debt recapitalization activities.
During the quarter, the company completed a $250 million financing deal with General Motors, Clear Channel Communications, Inc., DIRECTV, Inc., and a private investment group comprised of Columbia Capital, Telcom Ventures LLC and Madison Dearborn Partners. The combined $250 million investment is comprised of $75 million each from Clear Channel and the private investment group and $50 million each from General Motors and DIRECTV. Also during the quarter, American Mobile Satellite Corporation (NASDAQ:SKYC) finalized its purchase of a controlling interest in XM.
In October, XM successfully completed an initial public offering of 10.2 million shares priced at $12, which raised a total of $114.2 million. Since inception and inclusive of the initial public offering proceeds, the company has raised an aggregate $445.0 million in equity proceeds.
Hugh Panero, President and CEO of XM Satellite Radio, said, "XM has made significant progress toward delivering the next generation of radio. We have raised almost half a billion dollars in equity to implement our focused business strategy through a successful IPO and a group of well-regarded strategic investors. XM now stands as a public company with an impressive array of solid strategic partnerships with the nation's leading programming, distribution, radio and technology companies, and content providers.
"We have a seasoned management team that is moving quickly on all fronts to capture the tremendous marketing opportunity that our new national radio platform represents. XM has received encouraging initial responses from some of the country's largest advertisers and leading advertising agencies, and we are continuing to assemble the innovative, best-of-brand content that will drive consumer interest in advance of our nationwide commercial launch."
Manufacturing & Technology Partners
XM plans to initiate nationwide commercial service in the first half of 2001 after completing its two satellite launches by the first quarter 2001. The company's powerful satellite system is being designed and constructed by leaders in the industry, including Hughes Space & Communications, the world's leading satellite company; LCC International, Inc.; STMicroelectronics; and the Fraunhofer Institute.
The company has entered into several partnerships with top radio manufacturers to manufacture and distribute AM/FM/XM radios for auto and home use. In October, XM signed a technology agreement with Motorola, a global leader in providing integrated communications solutions and a leading supplier of integrated electronics systems to automobile manufacturers. Also during October, the company entered into a similar agreement with Mitsubishi Electric Automotive America, Inc., a leading manufacturer of automotive electronics and audio equipment, to design, develop, produce and market radios capable of receiving XM's new band of radio. These agreements complement the company's existing partnerships with other leading radio manufacturers, including Alpine, Delphi Delco, Pioneer and Sharp.
Next Generation Radio Programming
During the quarter, XM established an in-house programming unit, XM Originals, that will create innovative, original radio programming formats. The company has since entered into programming partnerships for XM Originals with a number of brand-name content providers, including The NewsHour with Jim Lehrer, The Sporting News and USA TODAY.
Also during the third quarter, XM added The BBC World Service and The Weather Channel to its growing brand-name content provider partnerships, which include Black Entertainment Network, Radio One, the Hispanic Broadcasting Corporation, Bloomberg News Radio, CNN/fn, CNN/Sports Illustrated and C-Span Radio. The XM BBC channel will provide 60% news and 40% other programming, much of it unavailable anywhere in the United States. The Weather Channel, the world's most relied upon source for weather information, will become the exclusive provider of weather forecasts and related information for several XM channels.
In addition, in August, legendary New York on-air personality, author and music historian Jonathan Schwartz joined the company's XM Originals unit as Artistic Coordinator of its American Standards format.
About XM Satellite Radio
XM Satellite Radio Inc. (NASDAQ: XMSR) is developing a new band of radio. It will use direct satellite-to-receiver broadcast technology to provide listeners in their cars and at home with crystal-clear sound seamlessly from coast to coast. XM will create and package up to 100 channels of digital-quality music, news, sports, talk and children's programming at its Washington, D.C. broadcast facility. The service will be uplinked to XM's two powerful satellites and transmitted directly to vehicle, home and portable radios across the country. XM is scheduled to launch its service during the first half of 2001 for a monthly subscription rate of $9.95.
XM Satellite Radio obtained one of only two satellite digital audio radio service (SDARS) licenses from the Federal Communications Commission in October 1997. First there was AM, then FM and soon... XM Satellite Radio. For more information, please visit the XM website: www.xmradio.com
Factors that could cause actual results to differ materially from those in the forward-looking statements in this press release include uncertainties associated with the launch of our satellites, our dependence on third party equipment vendors, our continuing need for additional financing, as well as other risks described in our registration statement on Form S-1 (File No. 333-83619) with the Securities and Exchange Commission. Copies of the filing are available upon request from our Investor Relations Department.