Exhibit 99.1
100 STREAMS
OF SATELLITE RADIO [LOGO OF SIRIUS RADIO]
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SIRIUS ANNOUNCES SECOND QUARTER 2003
FINANCIAL AND OPERATING RESULTS
Subscriptions reached 105,186, an Increase of 55% in Last Quarter
NEW YORK - August 6, 2003 - SIRIUS (NASDAQ: SIRI), known for delivering the very
best in commercial-free music and premium audio entertainment, today announced
its second quarter 2003 financial and operating results. The company previously
announced a major milestone during the quarter, when it reached 100,000
subscribers on June 20. SIRIUS ended the second quarter on June 30, 2003 with
105,186 subscribers, an increase of 55% during the quarter.
"This continued growth in SIRIUS subscribers confirms that we are getting
traction in the marketplace, and that our commercial-free music programming is
gaining a wider audience," said Joseph P. Clayton, President and CEO of SIRIUS.
"We were able to reach our subscriber target even without the benefit of the new
transportable products. Now that these `Plug & Play' receivers are becoming more
available in retail stores, we expect the pace to pick up even more."
During the second quarter, SIRIUS completed two major financing transactions
which eliminated the company's previously stated funding gap, and added
approximately $357 million in cash, giving the company added financial
flexibility.
"I am excited to have joined SIRIUS at such a pivotal time in its history," said
David Frear, SIRIUS' new Executive Vice President and Chief Financial Officer.
"In less than four months, SIRIUS has transformed itself to a company that is
fully-funded with $560 million in cash. With very little debt, our balance sheet
is clearly the strongest in this new and exciting industry."
In recent weeks, SIRIUS introduced its transportable "Plug & Play" products in
the retail marketplace. These products from Kenwood and Audiovox are now flowing
into stores, and that volume will continue to increase in the coming months.
SIRIUS also recently announced several new initiatives in the specialty markets
sector, including agreements with Avionics Innovations, Formula Boats and
Winnebago.
SECOND QUARTER 2003 VERSUS SECOND QUARTER 2002
For the second quarter of 2003, SIRIUS recognized total revenue of $2.1 million,
compared to $70 thousand for the second quarter of 2002. SIRIUS reported a loss
from operations of $(109.8) million for the second quarter of 2003, compared to
a loss from operations of $(89.9) million for the second quarter of 2002.
SIRIUS' EBITDA loss for the second quarter of 2003 was $(86.3) million, compared
with $(67.8) million in the second quarter of 2002. The EBITDA loss for the
second quarter of 2003 included a $14.5 million non-cash charge associated with
the disposal of SIRIUS' previous subscriber management system.
SIRIUS reported a net loss applicable to common stockholders of $(111.8)
million, or $(0.12) per share, for the second quarter of 2003, compared with a
net loss applicable to common stockholders of $(124.6) million, or $(1.62) per
share, for the second quarter of 2002.
For the second quarter of 2003, average monthly revenue per subscriber, or ARPU,
was $7.91. Excluding the costs of mail-in rebate programs, ARPU for the second
quarter of 2003 was $10.84.
FIRST HALF 2003 VERSUS FIRST HALF 2002
For the first half of 2003 SIRIUS recognized total revenue of $3.7 million,
compared to $103 thousand for the first half of 2002. SIRIUS reported a loss
from operations of $(208.9) million for the first half of 2003, compared to a
loss from operations of $(140.6) million for the first half of 2002. SIRIUS'
adjusted EBITDA loss for the first half of 2003 was $(161.4) million, compared
with $(104.0) million in the first half of 2002. SIRIUS' adjusted EBITDA loss
for the first half of 2003 excludes a $256.5 million gain in connection with the
completion of the company's restructuring in March 2003, and includes a $14.5
million non-cash charge associated with the disposal of SIRIUS' previous
subscriber management system.
SIRIUS reported a net loss applicable to common stockholders of $(60.0) million,
or $(0.09) per share, for the first half of 2003, compared with a net loss
applicable to common stockholders of $(214.7) million, or $(2.85) per share, for
the first half of 2002. Included in net income applicable to common stockholders
for the first half of 2003 was a $256.5 million gain in connection with the
completion of the company's restructuring in March 2003, and a deemed dividend
of $79.5 million associated with the elimination of its convertible preferred
stock in March 2003.
For the first half of 2003, ARPU was $8.94. Excluding the costs of mail-in
rebate programs, ARPU for the first half of 2003 was $10.85.
(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. This
definition of adjusted EBITDA may not be comparable to similarly titled measures
of other companies. 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.
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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, 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 Satellite Radio Inc.
Financial Highlights
(In thousands, except per share and subscriber data)
(Unaudited)
-----------
For the Three Months Ended For the Six Months Ended
June 30, June 30,
------------------------- -----------------------
2003 2002 2003 2002
---- ---- ---- ----
Statement of Operations:
Subscriber revenue, net of mail-in
rebates $ 2,029 $ 50 $ 3,583 $ 54
Advertising revenue, net of agency fees 27 20 44 49
Other revenue 17 -- 37 --
-------- -------- -------- --------
Total revenue 2,073 70 3,664 103
-------- -------- -------- --------
Operating expenses:
Cost of services:
Satellite and transmission 7,688 8,450 15,555 17,207
Programming and content 7,639 4,125 14,213 7,908
Customer service and billing 16,320 1,882 18,522 3,724
Sales and marketing 39,516 30,901 84,856 46,560
General and administrative 12,464 8,588 21,558 16,128
Research and development 4,904 13,425 9,887 21,138
Depreciation expense 23,463 22,099 47,563 36,580
Non-cash stock compensation
(benefit)/expense (123) 491 436 (8,533)
-------- -------- -------- --------
Total operating expenses 111,871 89,961 212,590 140,712
-------- -------- -------- --------
Loss from operations (109,798) (89,891) (208,926) (140,609)
Other income (expense):
Debt restructuring -- -- 256,538 --
Interest and investment income 1,327 1,517 2,670 3,517
Interest expense, net of amounts
capitalized (3,365) (24,893) (22,030) (55,086)
======== ======== ======== ========
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Total other income (expense) (2,038) (23,376) 237,178 (51,569)
Net income (loss) (111,836) (113,267) 28,252 (192,178)
Preferred stock dividends -- (11,165) (8,574) (22,207)
Preferred stock deemed dividends -- (171) (79,634) (342)
--------- --------- --------- ---------
Net loss applicable to common
stockholders $(111,836) $(124,603) $ (59,956) $(214,727)
========= ========= ========= =========
Net loss per share applicable to
common stockholders (basic and
diluted) $ (0.12) $ (1.62) $ (0.09) $ (2.85)
Weighted average common shares
outstanding (basic and diluted) 931,720 76,715 631,421 75,296
Reconciliation of net income (loss) to
Adjusted EBITDA:
Net income (loss) as reported
$(111,836) $(113,267) $ 28,252 $(192,178)
Add back non-EBITDA items
included in
net loss:
Depreciation expense 23,463 22,099 47,563 36,580
Interest and investment income (1,327) (1,517) (2,670) (3,517)
Interest expense, net of amounts
capitalized 3,365 24,893 22,030 55,086
Debt restructuring -- -- (256,538) --
--------- --------- --------- --------
Adjusted EBITDA
$ (86,335) $ (67,792) $(161,363) $(104,029)
========= ========= ========= =========
June 30, December 31,
2003 2002
------------------- -------------------
Select Balance Sheet Data:
Cash, cash equivalents and marketable
securities $ 560,093 $ 173,702
Restricted investments 7,200 7,200
Working capital 524,050 151,289
Total assets 1,660,830 1,340,940
Long-term debt, net of current portion 259,570 670,357
Accrued interest, net of current portion -- 46,914
Total liabilities 324,855 772,941
Convertible preferred stock -- 531,153
Accumulated deficit (899,227) (927,479)
Stockholders' equity 1,335,975 36,846
Other Data:
Subscribers (end of period) 105,186 29,947
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About SIRIUS
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(R), Nissan, Infiniti, Mazda and Audi. Automotive brands
that have announced plans to offer SIRIUS in select models include Ford,
Lincoln, Mercury, Mercedes-Benz, Jaguar, Volvo, 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.
Media Contacts:
Jim Collins
SIRIUS
Media and Investors
212.901.6422
jcollins@siriusradio.com
Cheryl Cramer
Investor Relations
SIRIUS
212.901.6466
ccramer@siriusradio.com
Thomas Meyer
PR21 for SIRIUS
Media Relations
310-566-2285
Thomas.Meyer@pr21.com
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