SIRIUS Satellite Radio Announces Second Quarter 2004 Financial and Operating Results
NEW YORK – July 21, 2004 – SIRIUS (NASDAQ: SIRI), the premium satellite radio provider known for delivering the very best in commercial-free music and premier sports programming to cars and homes across the country, today announced second quarter 2004 financial and operating results.
As of June 30, 2004, SIRIUS had 480,341 subscribers. This reflects record-setting net additions of 128,678 subscribers during the quarter, which exceeds SIRIUS’ previous record in the fourth quarter of 2003, and represents a 37% increase in subscribers over the first quarter of this year, as well as a 347% increase over the net subscriber additions of 37,127 reported on June 30, 2003. The company exceeded 500,000 subscribers on July 13, and expects to have one million subscribers by the end of this year.
During the second quarter of 2004, SIRIUS continued to experience significant gains in the retail channel, fueled by increased product availability and growing consumer awareness. During the quarter, SIRIUS added 81,185 subscribers from the retail channel, 315% more than were activated in the second quarter of 2003. SIRIUS products, including in-dash receivers for vehicles and boats, receivers for the home market, transportable “Plug-&-Play” receivers for cars, trucks, RVs, boats and homes, as well as portable boomboxes, are currently available nationwide.
“The second quarter was a strong one for SIRIUS, and is indicative of the excitement that we continue to generate for our premium programming,” said Joseph P. Clayton, CEO of SIRIUS. “It’s becoming clearer everyday that consumers are responding favorably to the quality, breadth and diversity of our content. With the start of our NFL play-by-play game coverage this coming football season, combined with the recent launch of Elvis Radio, yesterday’s premiere of Tony Hawk’s Demolition Radio, the upcoming launch of the Maxim Radio channel and our newly announced channel to be developed with Eminem, we are confident that we will continue to dazzle our listeners.”
During the second quarter of 2004, SIRIUS added 47,652 subscribers through its automotive, boating and trucking relationships, which is more than double the figure reported in the first quarter.
Conference Call Information:
SIRIUS will hold a conference call today at 10 am ET to discuss operating and financial results with Wall Street analysts. The public, members of the investment community and the press will have live access to the conference call via the company’s website www.sirius.com and on the Sirius service by tuning to SIRIUS Channel 131. A replay of the call will also be available on our website for 10 days.
SECOND QUARTER 2004 VERSUS SECOND QUARTER 2003
For the second quarter of 2004, SIRIUS recognized total revenue of $13.2 million, compared to $2.1 million for the second quarter of 2003. SIRIUS reported a loss from operations of $(133.0) million for the second quarter of 2004, compared to a loss from operations of $(109.8) million for the second quarter of 2003. Adjusted loss from operations for the quarter was $(97.3) million compared to adjusted loss from operations of $(86.5) million for the second quarter of 2003 (refer to reconciliation table of loss from operations to adjusted loss from operations).
SIRIUS reported a net loss applicable to common stockholders of $(136.8) million, or $(0.11) per share, for the second quarter of 2004, compared with a net loss applicable to common stockholders of $(111.8) million, or $(0.12) per share, for the second quarter of 2003.
For the second quarter of 2004, average monthly revenue per subscriber, or ARPU, was $10.54. Excluding the effects of mail-in rebate programs, ARPU for the second quarter of 2004 was $10.90.
SIRIUS maintains a strong cash position, ending the second quarter with $640 million in cash, cash equivalents, and marketable securities. Cash flow from operating activities for the quarter was $(64.8) million compared to cash flow from operating activities of $(64.6) million for the second quarter of 2003.
(Selected financial information follows).
SIRIUS defines adjusted loss from operations as loss from operations before depreciation expense, non-cash stock compensation expense, and expense for equity securities granted to third parties. Adjusted loss from operations is not a measure of financial performance under accounting principles generally accepted in the United States. SIRIUS believes adjusted loss from operations is useful to investors because it represents operating expenses of the company excluding the effects of non-cash items. Because adjusted loss from operations is not a measurement determined in accordance with accounting principles generally accepted in the United States and is thus susceptible to varying calculations, adjusted loss from operations as presented may not be comparable to other similarly titled measures of other companies 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 defines average monthly revenue per subscriber, or ARPU, as the total earned subscription revenue and activation revenue during the period, 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 defines subscriber acquisition costs, or SAC, as costs of incentives for the purchase, installation, and activation of SIRIUS radios, as well as subsidies paid to radio and chipset manufacturers, automakers and retailers and the negative margin on equipment sales. SAC is not a measure of financial performance under accounting principles generally accepted in the United States.
SIRIUS, now available to over 10 million DISH Network satellite TV and SIRIUS Satellite Radio subscribers, provides listeners with over 120 channels of the best commercial-free music, sports, information and entertainment, with digital quality sound coast-to-coast, broadcast daily from New York City, Los Angeles, Nashville, New Orleans, Houston and Daytona. SIRIUS offers 65 channels of 100% commercial-free music, featuring multiple categories of pop, rock, country, hip-hop, R&B, dance, jazz, classical and Latin music, along with more than 50 channels of world-class sports, news, talk entertainment, traffic and weather for a monthly subscription fee of only $12.95, with greater savings for upfront payments of multiple months or a year or more. SIRIUS also broadcasts live play-by-play games of the NHL and the NFL, and is the official satellite radio partner of the NFL.
SIRIUS Satellite Radio products for the car, truck, home, RV and boat are manufactured by Alpine, Audiovox, Blaupunkt, Clarion, Eclipse, Jensen, JVC, Kenwood, Panasonic and U.S. Electronics, and can be purchased at major retailers including Advance Auto Parts, Best Buy, Car Toys, Circuit City, Crutchfield, Good Guys, Wal-Mart, Sears, Tweeter and Ultimate Electronics, along with RadioShack and DISH Network outlets.
SIRIUS’ exclusive automotive partners DaimlerChrysler, Ford and BMW represent over 40% of new cars and light trucks sold annually in the United States. Automotive brands currently offering SIRIUS radios in select new car models include BMW, MINI, Chrysler, Dodge, Jeepâ, Nissan, Infiniti, Mazda, Audi, Ford, Lincoln-Mercury, Mercedes-Benz, Porsche and Volkswagen. Automotive brands that have announced plans to offer SIRIUS radios in select models include Jaguar, Volvo, Land Rover and Aston Martin. In 2004, SIRIUS radios are expected to be available in over 80 different car models, with more than 50 of them factory programs. Also, Hertz currently offers SIRIUS in 29 vehicle models at 53 major locations around the country. In addition, the Penske companies – Penske Auto Group, United Auto Group and Penske Trucking – are offering SIRIUS radios as a factory installed option, where available, in their cars and trucks through their dealerships.
Genmar Holdings, the world’s largest manufacturer of recreational boats, Formula Boats and Winnebago, the leading supplier of recreational vehicles and motor homes, also offer SIRIUS.
Click on www.sirius.com to listen to SIRIUS live, or to find a SIRIUS retailer or car dealer in your area.
Any statements that express, or involve discussions as to, expectations, beliefs, plans, objectives, assumptions, future events or performance with respect to SIRIUS Satellite Radio Inc. are not historical facts and may be forward-looking and, accordingly, such statements involve estimates, assumptions and uncertainties which could cause actual results to differ materially from those expressed in any forward-looking statements. Accordingly, any such statements are qualified in their entirety by reference to the factors discussed in our Annual Report on Form 10-K for the year ended December 31, 2003 filed with the Securities and Exchange Commission. Among the key factors that have a direct bearing on our results of operations are: our dependence upon third parties to manufacture, distribute, market and sell SIRIUS radios and components for those radios; the unproven market for our service; our competitive position and any events which affect the useful life of our satellites.