NEW YORK — May 23, 2003 — SIRIUS (NASDAQ: SIRI), 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 closed its offering of 3½% Convertible Notes due 2008.
The net proceeds of approximately $168,875,000, before expenses, are expected to eliminate the company’s funding gap, estimated to be approximately $100 million, and fund SIRIUS to cash-flow breakeven, which is expected in 2005 with approximately two million subscribers. The company fully expects to reach 100,000 subscribers this quarter and more than 300,000 by year-end. SIRIUS intends to use the net proceeds from the sale of the notes for general corporate purposes.
As previously disclosed, the notes are convertible into SIRIUS’ common stock at the option of the holder at a conversion rate of 724.6377 shares per $1,000 principal amount, or $1.38 per share. The notes may not be redeemed at the option of Sirius prior to maturity.
“Our ability to raise this capital in today’s financial markets environment is indicative of the confidence felt within the financial community about our business,” said Joseph P. Clayton, President & CEO of SIRIUS. “With our subscriber base more than doubling during the first quarter of this year, our automotive partners firmly on board, and the introduction of portable ‘Plug & Play’ products this summer, we are feeling a strong wind in our sails.” On May 22, Standard & Poor’s Ratings Services assigned its ‘CCC–’ rating to the 3½% Convertible Notes, and also raised its corporate credit rating on Sirius Satellite Radio Inc. to ‘CCC’ from ‘D’, stating, “The rating actions and the stable outlook reflect the company’s improved capital structure and liquidity following its recent recapitalization,” according to Standard & Poors.
SIRIUS is the only satellite radio service bringing listeners more than 100 streams of the best music and entertainment Coast-to-coast. SIRIUS offers 60 music streams with no commercials, along with over 40 world-class sports, news, and entertainment streams for a monthly subscription fee of only $12.95, with greater savings for upfront payments of multiple months or a year or more. Stream Jockeys create and deliver uncompromised music in virtually every genre to our listeners 24-hours a day. Satellite radio products bringing SIRIUS to listeners in the car, truck, home, RV, and boat are manufactured by Kenwood, Panasonic, Clarion, and Audiovox, and are available at major retailers including Circuit City, Best Buy, Car Toys, Good Guys, Tweeter, Ultimate Electronics, Sears, and Crutchfield. SIRIUS is the leading OEM satellite radio provider, with exclusive partnerships with DaimlerChrysler, Ford, and BMW. Automotive brands currently offering SIRIUS radios in select new car models include BMW, MINI, Chrysler, Dodge, Jeep®, Nissan, Infiniti, and Mazda. Automotive brands that have announced plans to offer SIRIUS in select models include Ford, Lincoln, Mercury, Mercedes-Benz, Jaguar, Volvo, Audi, Volkswagen, Land Rover, and Aston Martin.
Click on 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, 2002 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.