Exhibit 99.1
[GRAPHIC] [SIRIUS LOGO]
it's_ON
SIRIUS SATELLITE RADIO ANNOUNCES FOURTH QUARTER AND YEAR-END 2003
FINANCIAL AND OPERATING RESULTS
o Subscribers Increased More Than 8-Fold Over Year-End 2002 and 74% Over
Previous Quarter
o Retail Growth Accelerated with Strong Holiday Sales
o New Product, Programming and Distribution Initiatives Solidify
Company's Position as Premium Satellite Radio Provider
NEW YORK - January 28, 2004 - SIRIUS (NASDAQ: SIRI), known for delivering the
very best in commercial-free music and premium sports programming to cars and
homes across the country, today announced fourth quarter and year-end 2003
financial and operating results.
As of December 31, 2003, SIRIUS had 261,061 subscribers. This represents a net
subscriber addition of 111,449 during the fourth quarter of 2003, a 74% increase
from the company's total subscribers at the end of the third quarter of 2003,
and over eight times the number of ending subscribers reported by the company at
December 31, 2002.
During the fourth quarter of 2003, SIRIUS experienced significant gains in the
retail aftermarket channel, fueled by strong sales during the holiday selling
season. SIRIUS added more than 86,000 subscribers from the retail aftermarket
channel, 162% more than were activated in the third quarter of the year. During
the busy shopping season, national consumer electronics retailers showcased
SIRIUS as a featured product, and SIRIUS was named a best-bet in gift guides
from top consumer publications, such as Good Housekeeping, Business Week,
Rolling Stone, Newsweek and New York Magazine.
"Consumers flocked to our extensive product line-up, including four
feature-laden transportable Plug-&-Play receivers - one of them packaged in an
easy to purchase `Jam Pack'. The appeal of these new products, combined with our
premium, differentiated content, made SIRIUS a very popular holiday gift item,"
said Joseph P. Clayton, President and CEO, SIRIUS. "We had a great quarter,
increasing our share of satellite radio retail sales to approximately 32% at the
end of November, according to the NPD Group, up from approximately 11% at the
end of 2002."
During the fourth quarter of 2003, SIRIUS added over 24,000 subscribers through
its automotive, boating and trucking partnerships. By the end of 2003,
DaimlerChrysler, Ford, BMW, Nissan, Infiniti and Audi offered SIRIUS Satellite
Radio in more than 50 different vehicle models. In 2004, the company's
automotive partners are expected to offer SIRIUS in nearly 80 vehicle models,
with 50 of those offered as a factory option.
SIRIUS maintains a strong cash position, ending the year with $550 million in
cash, cash equivalents, and marketable securities. During the fourth quarter of
2003, SIRIUS raised $150 million through a common stock offering. SIRIUS also
reduced its debt during the fourth quarter through the exchange of common stock
for $65 million of the company's outstanding convertible notes.
Recent Developments:
SIRIUS recently signed several important agreements in the programming, product
and distribution areas, which the company believes will enhance its consumer
offering and competitive position.
Yesterday, SIRIUS announced agreements with Penske Automotive Group, Inc.,
United Auto Group, Inc., Penske Truck Leasing Co. L.P. and Penske Corporation.
Penske Automotive Group and United Auto Group together own and operate
approximately 144 auto dealerships in the United States. Penske Truck Leasing,
the largest truck renting and leasing company in the United States, leases heavy
trucks on a long-term basis to individual and fleet operators and rents trucks
on a short-term basis to individuals. Penske Corporation and its affiliates are
active participants in motorsports, with racing teams that participate in
NASCAR, IRL and other events.
United Auto Group and Penske Automotive Group each have agreed to order SIRIUS
radios, where available, with all of the vehicles they purchase from automakers,
and to use best efforts to include a bundled subscription to the company's
service in the sale or lease of these vehicles. Penske Truck Leasing has agreed
to order SIRIUS radios, where available, with all new trucks it purchases.
Penske Truck Leasing will also install SIRIUS radios in a select number of
trucks it leases to consumers. Each of these companies plans to launch an
extensive joint marketing effort with SIRIUS, including mailings to customers,
prominent signage in dealerships, use of the SIRIUS satellite radio service in
their dealerships and exposure in Penske racing efforts.
In December 2003, SIRIUS announced a long-term arrangement with the National
Football League. SIRIUS will offer its subscribers access to NFL games starting
with the 2004-2005 season. This arrangement, along with SIRIUS' existing
relationships with the NHL and the NBA, solidify SIRIUS' position as the
satellite radio sports leader.
At the 2004 Consumer Electronics Show earlier this month, SIRIUS announced
several new initiatives. Building on a multi-brand product strategy, SIRIUS
announced further additions to its already impressive line-up of consumer
electronics partners. In 2003, Audiovox, JVC, Brix and Antex joined Kenwood,
Clarion, Panasonic and Jensen as SIRIUS manufacturers. In 2004, SIRIUS expects
to add Eclipse, Blaupunkt, Sanyo and Alpine and premium custom home installation
partners Niles and
-2-
Crestron. Other new partners for 2004 are expected to include: U.S. Electronics,
Magnadyne, PS Engineering and Tivoli.
Also at CES, SIRIUS unveiled new data services, which are expected to begin with
the transmission of sports scores and stock quotes. Existing SIRIUS radios are
backwards-compatible with this new service, which will be offered at no extra
cost to subscribers.
At last year's CES, SIRIUS was the first satellite radio provider to demonstrate
proof-of-concept for video transmission. This year, SIRIUS and Delphi
demonstrated a product capable of receiving and displaying video, and allowed
CES attendees to sample this new service by test-driving a Ford Explorer.
SIRIUS' video offering is expected to start with 3 to 4 channels of children's
programming in mid-2005.
SIRIUS has also announced a full suite of new traffic services, which is
expected to start in the third quarter of 2004 with a simple traffic solution
that is backwards-compatible with all existing SIRIUS radios.
In partnership with Dolby Labs, SIRIUS is now broadcasting in Dolby Pro Logic II
surround sound. Currently, this applies to any song recorded in multi-channel
sound, but will soon expand to include SIRIUS Sessions, live performances which
will now be recorded and broadcast in Dolby Pro Logic II. SIRIUS will also begin
to upgrade its music library by including multi-channel Super Audio CD (SACD)
and DVD-Audio selections.
Lastly, Soundgate'r' and SIRIUS have announced a translator that can be
connected to any satellite-radio-ready car stereo. Customers who own a vehicle
equipped with a competing satellite radio service will be able to subscribe to
SIRIUS' premium programming by simply adding a standard SIRIUS tuner and a small
translator module.
Conference Call Information:
SIRIUS will hold a conference call today at 10:00 AM EST to discuss operating
and financial results. The access numbers for the call are 973.582.2745 (toll)
or 877.691.0878 (toll free). The call will also be accessible via a live
web-cast on www.sirius.com, and a replay will be available on the company's
website for 30 days.
-3-
FOURTH QUARTER 2003
For the fourth quarter of 2003, SIRIUS recognized total revenue of $5.0 million,
compared to $685 thousand for the fourth quarter of 2002. SIRIUS reported a loss
from operations of $(125.1) million for the fourth quarter of 2003, compared to
a loss from operations of $(90.8) million for the fourth quarter of 2002.
SIRIUS reported a net loss applicable to common stockholders of $(147.8)
million, or $(0.14) per share, for the fourth quarter of 2003, compared with a
net loss applicable to common stockholders of $(134.1) million, or $(1.74) per
share, for the fourth quarter of 2002.
SIRIUS' adjusted EBITDA loss for the fourth quarter of 2003 was $(92.3) million,
compared with $(67.5) million for the fourth quarter of 2002.
For the fourth quarter of 2003, average monthly revenue per subscriber, or ARPU,
was $8.59. Excluding the effects of mail-in rebate programs, ARPU for the fourth
quarter of 2003 was $10.80.
YEAR ENDED DECEMBER 31, 2003
For the year ended December 31, 2003, SIRIUS recognized total revenue of $12.9
million, compared to $805 thousand for the year ended December 31, 2002. SIRIUS
reported a loss from operations of $(437.5) million for 2003, compared to a loss
from operations of $(313.1) million for 2002.
SIRIUS reported a net loss applicable to common stockholders of $(314.4)
million, or $(0.38) per share, for the 2003 period, compared with a net loss
applicable to common stockholders of $(468.5) million, or $(6.13) per share, for
the 2002 period. Included in net loss applicable to common stockholders for 2003
was a $256.5 million gain associated 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.
SIRIUS' adjusted EBITDA loss for 2003 was $(330.7) million, compared with
$(238.2) million for 2002. SIRIUS' adjusted EBITDA loss for the 2003 period
includes a $14.5 million non-cash charge associated with the disposal of SIRIUS'
previous subscriber management system.
For 2003, ARPU was $9.39. Excluding the effects of mail-in rebate programs, ARPU
for 2003 was $10.64.
(Selected financial information follows).
-4-
SIRIUS defines adjusted EBITDA loss as net loss before interest and investment
income, interest expense, net of amounts capitalized, depreciation expense,
non-cash stock compensation 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 and chipset manufacturers, automakers and retailers and
negative margin on equipment. 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.
-5-
SIRIUS Satellite Radio Inc.
Financial Highlights
(In thousands, except pers
share and subscriber data)
(Unaudited)
For the Three Months Ended For the Year Ended
December 31, December 31,
-------------------------- ---------------------
2003 2002 2003 2002
---------- --------- --------- ---------
Statements of Operations:
Subscriber revenue, including effects of
mail-in rebates $ 4,835 $ 620 $ 12,615 $ 623
Advertising revenue, net of agency fees 33 35 116 146
Equipment revenue 61 -- 61 --
Other revenue 21 30 80 36
---------- --------- --------- ---------
Total revenue 4,950 685 12,872 805
---------- --------- --------- ---------
Operating expenses:
Cost of services:
Satellite and transmission 9,063 13,961 32,604 39,308
Programming and content 8,687 10,621 30,398 22,728
Customer service and billing 2,899 2,283 23,657 7,862
Cost of equipment 115 115
Sales and marketing 35,443 23,124 121,216 87,347
Subscriber acquisition costs 27,835 5,387 74,860 21,038
General and administrative 7,497 6,433 36,211 30,682
Research and development 5,666 6,388 24,534 30,087
Depreciation expense 24,124 23,156 95,353 82,747
Non-cash stock compensation
expense (benefit) 8,738 128 11,454 (7,867)
---------- --------- --------- ---------
Total operating expenses 130,067 91,481 450,402 313,932
---------- --------- --------- ---------
Loss from operations (125,117) (90,796) (437,530) (313,127)
Other income (expense):
Debt restructuring -- (6,543) 256,538 (8,448)
Interest and investment income 1,276 727 5,287 5,257
Interest expense, net of amount capitalized (23,937) (25,474) (50,510) (106,163)
---------- --------- --------- ---------
Total other income (expense) (22,661) (31,290) 211,315 (109,354)
Net loss (147,778) (122,086) (226,215) (422,481)
Preferred stock dividends -- (11,806) (8,574) (45,300)
Preferred stock deemed dividends -- (172) (79,634) (685)
---------- --------- --------- ---------
Net loss applicable to common stockholders $ (147,778) $(134,064) $(314,423) $(468,466)
========== ========= ========= =========
Net loss per share applicable to
common stockholders (basic and diluted) $ (0.14) $ (1.74) $ (0.38) $ (6.13)
========== ========= ========= =========
Weighted average common shares
outstanding (basic and diluted) 1,041,365 77,268 827,186 76,394
========== ========= ========= =========
-6-
For the Three Months Ended For the Year Ended
December 31, December 31,
-------------------------- ---------------------
2003 2002 2003 2002
--------- --------- --------- ---------
Adjusted EBITDA Reconciliation:
Net loss as reported $(147,778) $(122,086) $(226,215) $(422,481)
Add back non-EBITDA items included in net loss:
Depreciation expense 24,124 23,156 95,353 82,747
Non-cash stock compensation expense (benefit) 8,738 128 11,454 (7,867)
Interest and investment income (1,276) (727) (5,287) (5,257)
Interest expense, net of amount capitalized 23,937 25,474 50,510 106,163
Debt restructuring -- 6,543 (256,538) 8,448
--------- --------- --------- ---------
Adjusted EBITDA loss $ (92,255) $ (67,512) $(330,723) $(238,247)
========= ========= ========= =========
December 31, December 31,
2003 2002
------------ ------------
Selected Balance Sheet Data:
Cash, cash equivalents and marketable securities $ 549,883 $ 173,702
Restricted investments 8,747 7,200
Working capital 497,661 151,289
Total assets 1,617,317 1,340,940
Long-term debt 194,803 670,357
Accrued interest, net of current portion -- 46,914
Total liabilities 292,123 772,941
Convertible preferred stock -- 531,153
Accumulated deficit (1,153,694) (927,479)
Stockholders' equity 1,325,194 36,846
Other Data:
Subscribers (end of period) 261,061 29,947
-7-
SIRIUS Satellite Radio Inc.
Quarterly Data:
(Unaudited)
YTD
2003 Q4 2003 Q3 2003 Q2 2003 Q1 2003
------- ------- ------- ------- -------
Subscribers:
Beginning subscribers 29,947 149,612 105,186 68,059 29,947
Net additions 231,114 111,449 44,426 37,127 38,112
------- ------- ------- ------- -------
Ending subscribers 261,061 261,061 149,612 105,186 68,059
Retail 197,650 197,650 110,821 77,713 51,969
OEM and Special Markets 39,400 39,400 15,358 7,630 4,252
Hertz 24,011 24,011 23,433 19,843 11,838
YTD
2003 Q4 2003 Q3 2003
------ ------- -------
Monthly ARPU:
Average revenue per subscriber $12.02 $11.99 $12.09
Effect of Hertz subscribers (1.38) (1.19) (1.78)
------ ------ ------
ARPU before effects of rebates $10.64 $10.80 $10.31
Effect of hardware rebates (1.25) (2.21) 0.89
------ ------ ------
Reported ARPU $ 9.39 $ 8.59 $11.20
Average revenue per Hertz subscriber $ 3.13 $ 2.65 $ 2.12
SAC:
Total SAC per gross add $ 293 $ 222 $ 522
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
-8-
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
212.901.6486
ccramer@SIRIUSradio.com
Thomas Meyer
PR21 for SIRIUS
Media Relations
310.566.2285
Thomas.Meyer@pr21.com
-9-