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Old 08-02-2005, 07:54 AM   #1
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Default SIRIUS Reports Q2 Results



SIRIUS Satellite Radio Reports Record Revenue for Second Quarter 2005

- Revenue Up 295% and Net Subscriber Additions Up 184% Over Prior Year Second Quarter - 2005 Year-End Subscriber Guidance Increased to 3 Million and Revenue Guidance Increased to $225 Million

NEW YORK, Aug 02, 2005 --
SIRIUS Satellite Radio today announced strong second quarter financial and operating results, driven by robust subscriber growth in its retail and automotive OEM distribution channels, and continued demand for its superior programming.

As of June 30, 2005, SIRIUS had 1,814,626 subscribers. The second quarter subscriber figure reflects net additions of 365,931 subscribers, a 184% increase over the year-ago figure of 128,678 net additions.

For the third time this year, the company is raising its 2005 year-end subscriber guidance. SIRIUS now expects to have 3 million subscribers at year-end, up from previous guidance of approximately 2.7 million subscribers. The company attributes its revised outlook to continued momentum in the retail and automotive OEM distribution channels, and expectations of strong consumer demand for SIRIUS' exclusive programming, including the NFL, Martha Stewart Living Radio and Howard Stern, as well as the continued appeal of its commercial-free music.

"Our great second quarter results clearly indicate that momentum for SIRIUS is accelerating," said Mel Karmazin, CEO of SIRIUS. "We beat Wall Street consensus expectations on all important metrics through a continuing focus on sound business execution, while maintaining low churn and very high levels of customer satisfaction. Plus, our automotive channel showed very strong results and consumers responded favorably to our second quarter retail promotion. Going into the second half of the year, we believe that creative new programming, additional automotive factory programs and the introduction of exciting new products will continue to drive our strong growth for the future."

SIRIUS reported record revenue of $52.2 million for the second quarter of 2005, a 295% increase over the $13.2 million reported for the year-ago quarter. Average monthly churn during the second quarter of 2005 was 1.4%.

The company reported subscriber acquisition costs (SAC) per gross subscriber addition of $160 for the second quarter of 2005, a 32% improvement over SAC per gross subscriber addition of $234 in the year-ago quarter.

During the second quarter of 2005, SIRIUS added 244,985 net subscribers from its retail channel, a 137% increase over 103,201 retail net additions in the year-ago quarter, and a 23% sequential increase over 198,558 retail net additions in the first quarter of 2005. The company also added 121,664 net subscribers from its automotive OEM channel, a 375% increase over 25,636 net additions from that channel in the second quarter of 2004, and a 13% sequential increase over 107,855 automotive OEM net additions in the first quarter of 2005.

SIRIUS reported a net loss of ($177.5) million, or ($0.13) per share, for the second quarter of 2005 compared with a net loss of ($136.8) million, or ($0.11) per share, for the second quarter of 2004.

During the quarter, SIRIUS and the Ford Motor Company announced an agreement that extends SIRIUS' exclusive relationship with Ford through September 2011, with the option for Ford to extend the agreement through September 2013. Ford and SIRIUS also recently announced that Ford will offer SIRIUS as a factory installed option on select vehicles beginning in August of this year. Ford and Lincoln Mercury expect to generate up to one million SIRIUS subscribers over the 2006 and 2007 model years, and expect to significantly increase factory-installed volumes in the 2008 model year. DaimlerChrysler's SIRIUS factory installation program continues to be on track, and they expect to produce more than 500,000 SIRIUS subscribers over the 2005 and 2006 model years.

SIRIUS continues to add more innovative programming to appeal to subscribers and advertisers. Beginning this month, SIRIUS will launch its second season of NFL play-by-play coverage as The Official Satellite Radio Partner of the NFL, and introduce Martha Stewart Living Radio and other new programming offerings. The company is also preparing for the arrival of Howard Stern in January 2006 and, in 2007, NASCAR.
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Old 08-02-2005, 08:40 PM   #2
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Looks like mostly good news to me.

I firmly believe Sirius is headed in the right direction.

By the end of 2006, Sirius will be breathing down XM's neck as far as subscriber numbers and other key factors.

Sirius has a small but noticeable advantage in music programming, as well as a significant advantage in sports. As for news/information, talk and entertainment, I'd have to rate it pretty much a toss up. I'll give XM the edge in the traffic/weather department, but that's virtually irrelevant when it comes to attracting new subscribers.

Sports and Stern will carry the day. Martha Stewart won't be as big a factor, but don't underestimate her ability to draw more women to Sirius. She's still got a sizeable and dedicated following.

I think Stern will bring enough new subscribers on board to make Sirius's deal with him worthwhile, even though it was a hefty price.

Sirius is pretty much good to go on programming, although some fine tuning is in order.

They now need to concentrate on getting several good brand name portable receivers on the market, similar to the XM2Go units, but with more advanced features like MP3 etc.
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