Exhibit 99.1
100 STREAMS [SIRIUS LOGO]
OF SATELLITE RADIO it's_ON
SIRIUS ANNOUNCES THIRD QUARTER 2003
FINANCIAL AND OPERATING RESULTS
o Subscribers totaled 149,612 at quarter end; an increase of 42% from
total subscribers at last quarter end
o Revenue more than doubles from last quarter as fixed costs remain
stable
NEW YORK - October 29, 2003 - SIRIUS (NASDAQ: SIRI), known for delivering the
very best in commercial-free music and premium audio entertainment to cars and
homes across the country, today announced third quarter 2003 financial and
operating results.
As of September 30, 2003, SIRIUS reported 149,612 subscribers. This represents a
net subscriber addition of 44,426 for the third quarter of 2003, a 42% increase
from the company's total subscribers at the end of the second quarter of 2003
and over twelve times the number of ending subscribers reported for the third
quarter of 2002.
"With three brands of transportable Plug-&-Play products now available and more
on the way, we believe SIRIUS is well positioned to take advantage of the
upcoming holiday selling season", said Joseph P. Clayton, President and CEO of
SIRIUS. "During a seasonally slow third quarter at retail, SIRIUS showed strong
signs of consumer acceptance this summer. Based on data from NPD Group, our
retail unit share increased by 48% over the previous quarter, which reflects
both better products, more brands, and increased consumer awareness."
SIRIUS maintains a strong cash position, ending the quarter with $479 million in
cash, cash equivalents, and marketable securities.
"With a solid cash position and very little debt, our balance sheet remains the
strongest in satellite radio. We have the working capital necessary to continue
to execute our business plan and grow our subscriber base," said David Frear,
Chief Financial Officer of SIRIUS.
During the third quarter, SIRIUS significantly enhanced its product portfolio
and premium programming offerings. In addition to completing the rollout of
transportable Plug-&-Play products from Kenwood and Audiovox, SIRIUS also
partnered with The Brix Group to introduce an attractive, rugged portable unit
for the trucking market, called the Streamer.
The company expects to further expand its product assortment this year with a
dedicated in-home receiver and a portable boombox.
Adding to its strong sports line-up, SIRIUS recently announced a marketing and
sponsorship agreement with the National Hockey League. SIRIUS will carry up to
40 NHL games per week. In September, Ford and SIRIUS announced that SIRIUS is
now available as an option on 10 Ford vehicles. Ford, Mercedes-Benz,
DaimlerChrysler, BMW, Nissan, Infiniti, and Audi are all now offering Sirius as
a factory or dealer option on select 2004 models.
THIRD QUARTER 2003
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For the third quarter of 2003, SIRIUS recognized total revenue of $4.3 million,
compared to $17 thousand for the third quarter of 2002 and $2.1 million for the
second quarter of 2003. SIRIUS reported a loss from operations of $(103.5)
million for the third quarter of 2003, compared to a loss from operations of
$(81.7) million for the third quarter of 2002.
SIRIUS reported a net loss applicable to common stockholders of $(106.7)
million, or $(0.11) per share, for the third quarter of 2003, compared with a
net loss applicable to common stockholders of $(119.7) million, or $(1.56) per
share, for the third quarter of 2002.
SIRIUS' adjusted EBITDA loss for the third quarter of 2003 was $(79.8) million,
compared with $(58.7) million for the third quarter of 2002. SIRIUS' adjusted
EBITDA loss for the third quarter of 2002 excludes $1.9 million of costs
associated with the company's restructuring.
For the third quarter of 2003, average monthly revenue per subscriber, or ARPU,
was $11.20. Excluding the effects of mail-in rebate programs, ARPU for the third
quarter of 2003 was $10.31.
YEAR TO DATE 2003
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For the year to date period ended September 30, 2003, SIRIUS recognized total
revenue of $7.9 million, compared to $120 thousand for the year to date period
ended September 30, 2002. SIRIUS reported a loss from operations of $(312.4)
million for the 2003 period, compared to a loss from operations of $(222.3)
million for the 2002 period.
SIRIUS reported a net loss applicable to common stockholders of $(166.6)
million, or $(0.22) per share, for the 2003 period, compared with a net loss
applicable to common stockholders of $(334.4) million, or $(4.41) per share, for
the 2002 period. Included in net loss applicable to common stockholders for the
2003 period 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.
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SIRIUS' adjusted EBITDA loss for the 2003 period was $(241.2) million, compared
with $(162.7) million for the 2002 period. SIRIUS' adjusted EBITDA loss for the
2003 period 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' adjusted EBITDA loss for the 2002 period excludes $1.9 million
of costs associated with the company's restructuring.
For the 2003 period, ARPU was $10.01. Excluding the effects of mail-in rebate
programs, ARPU for the 2003 period was $10.56.
(Selected Balance Sheet Data and Statement of Operations follow).
SIRIUS defines adjusted EBITDA loss as net loss before interest and investment
income, interest expense, net of amounts capitalized, 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. In addition, we have recognized a gain
associated with the restructuring of our debt. 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 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 manufacturers, automakers and retailers, and payments to
Agere. SAC 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.
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Sirius Satellite Radio Inc.
Financial Highlights
(In thousands, except per
share and subscriber data)
(Unaudited)
For the Three Months Ended For the Nine Months Ended
September 30, September 30,
-------------------------- ------------------------
2003 2002 2003 2002
--------- --------- --------- ---------
Statement of Operations:
Subscriber revenue, including effects of
mail-in rebates $ 4,197 $ (51) $ 7,780 $ 3
Advertising revenue, net of agency fees 39 62 83 111
Other revenue 22 6 59 6
--------- --------- --------- ---------
Total revenue 4,258 17 7,922 120
--------- --------- --------- ---------
Operating expenses:
Cost of services:
Satellite and transmission 7,986 8,140 23,541 25,347
Programming and content 7,498 4,199 21,711 12,107
Customer service and billing 2,236 1,855 20,758 5,579
Sales and marketing 27,152 27,953 90,870 64,223
Subscriber acquisition costs 25,887 5,361 47,025 15,651
General and administrative 7,156 8,121 28,714 24,249
Research and development 3,884 2,561 13,771 23,699
Depreciation expense 23,666 23,011 71,229 59,591
Non-cash stock compensation
expense (benefit) 2,280 538 2,716 (7,995)
--------- --------- --------- ---------
Total operating expenses 107,745 81,739 320,335 222,451
--------- --------- --------- ---------
Loss from operations (103,487) (81,722) (312,413) (222,331)
Other income (expense):
Debt restructuring -- (1,905) 256,538 (1,905)
Interest and investment income 1,341 1,013 4,011 4,530
Interest expense, net of amount
capitalized (4,543) (25,603) (26,573) (80,689)
--------- --------- --------- ---------
Total other income (expense) (3,202) (26,495) 233,976 (78,064)
Net loss (106,689) (108,217) (78,437) (300,395)
Preferred stock dividends -- (11,287) (8,574) (33,494)
Preferred stock deemed dividends -- (171) (79,634) (513)
--------- --------- --------- ---------
Net loss applicable to common
stockholders $(106,689) $(119,675) $(166,645) $(334,402)
========= ========= ========= =========
Net loss per share applicable to
common stockholders (basic and
diluted) $ (0.11) $ (1.56) $ (0.22) $ (4.41)
========= ========= ========= =========
Weighted average common shares
outstanding (basic and diluted) 998,156 76,852 755,009 75,820
========= ========= ========= =========
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For the Three Months Ended For the Nine Months Ended
September 30, September 30,
-------------------------- -------------------------
2003 2002 2003 2002
--------- --------- --------- ---------
Net loss as reported $(106,689) $(108,217) $ (78,437) $(300,395)
Add back non-EBITDA items included in
net loss:
Depreciation expense 23,666 23,011 71,229 59,591
Interest and investment income (1,341) (1,013) (4,011) (4,530)
Interest expense, net of amount
capitalized 4,543 25,603 26,573 80,689
Debt restructuring -- 1,905 (256,538) 1,905
--------- --------- --------- ---------
Adjusted EBITDA loss $ (79,821) $ (58,711) $(241,184) $(162,740)
========= ========= ========= =========
September 30, December 31,
2003 2002
------------- ------------
Selected Balance Sheet Data:
Cash, cash equivalents and marketable
securities $ 479,111 $ 173,702
Restricted investments 9,007 7,200
Working capital 439,267 151,289
Total assets 1,568,301 1,340,940
Long-term debt 259,686 670,357
Accrued interest, net of current portion -- 46,914
Total liabilities 336,705 772,941
Convertible preferred stock -- 531,153
Accumulated deficit (1,005,916) (927,479)
Stockholders' equity 1,231,596 36,846
Other Data:
Subscribers (end of period) 149,612 29,947
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Sirius Satellite Radio Inc.
Quarterly Data:
(Unaudited)
Q3 2003 Q2 2003 Q1 2003
------- ------ ------
Subscribers:
Beginning subscribers 105,186 68,059 29,947
Net additions 44,426 37,127 38,112
------- ------ ------
Ending subscribers 149,612 105,186 68,059
Retail 110,821 77,713 51,969
OEM and Special Markets 15,358 7,630 4,252
Hertz 23,433 19,843 11,838
Q3 2003
-------
Monthly ARPU:
Average revenue per subscriber $12.09
Effect of Hertz subscribers $(1.78)
-------
ARPU before effects of rebates $10.31
Effect of hardware rebates $0.89
-------
Reported ARPU $11.20
Average revenue per Hertz subscriber $2.12
SAC:
Total SAC per gross add $522
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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, Audi, Ford and
Lincoln-Mercury. Automotive brands that have announced plans to offer SIRIUS in
select models include Mercedes-Benz, Jaguar, Volvo, Volkswagen, Land Rover and
Aston Martin. Genmar Holdings, the world's largest manufacturer of recreational
boats, Formula Boats and Winnebago, the leading supplier of recreational
vehicles and motor homes, have also announced plans to 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, 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 Relations
212.901.6422
jcollins@siriusradio.com
Cheryl Cramer
SIRIUS
Investor Relations
212.901.6466
ccramer@siriusradio.com
Thomas Meyer
PR21 for SIRIUS
Media Relations
310.566.2285
Thomas.Meyer@pr21.com
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