Exhibit 99.1
[SIRIUS SATELLITE RADIO LOGO] Over 120 Channels
SIRIUS SATELLITE RADIO ANNOUNCES SECOND QUARTER
2004 FINANCIAL AND OPERATING RESULTS
o Subscriber Base Increased 37% to 480,341
o Record Quarter For Net Additions
o Revenue Improved 42% Over First Quarter 2004
o Company Reaffirms Forecast of One Million Subscribers by Year End
NEW YORK - July 21, 2004 - SIRIUS (NASDAQ: SIRI), the premium satellite radio
provider known for delivering the very best in commercial-free music and premier
sports programming to cars and homes across the country, today announced second
quarter 2004 financial and operating results.
As of June 30, 2004, SIRIUS had 480,341 subscribers. This reflects
record-setting net additions of 128,678 subscribers during the quarter, which
exceeds SIRIUS' previous record in the fourth quarter of 2003, and represents a
37% increase in subscribers over the first quarter of this year, as well as a
347% increase over the net subscriber additions of 37,127 reported on June 30,
2003. The company exceeded 500,000 subscribers on July 13, and expects to have
one million subscribers by the end of this year.
During the second quarter of 2004, SIRIUS continued to experience significant
gains in the retail channel, fueled by increased product availability and
growing consumer awareness. During the quarter, SIRIUS added 81,185 subscribers
from the retail channel, 315% more than were activated in the second quarter of
2003. SIRIUS products, including in-dash receivers for vehicles and boats,
receivers for the home market, transportable "Plug-&-Play" receivers for cars,
trucks, RVs, boats and homes, as well as portable boomboxes, are currently
available nationwide.
"The second quarter was a strong one for SIRIUS, and is indicative of the
excitement that we continue to generate for our premium programming," said
Joseph P. Clayton, CEO of SIRIUS. "It's becoming clearer everyday that consumers
are responding favorably to the quality, breadth and diversity of our content.
With the start of our NFL play-by-play game coverage this coming football
season, combined with the recent launch of Elvis Radio, yesterday's premiere of
Tony Hawk's Demolition Radio, the upcoming launch of the Maxim Radio channel and
our newly announced channel to be developed with Eminem, we are confident that
we will continue to dazzle our listeners."
During the second quarter of 2004, SIRIUS added 47,652 subscribers through its
automotive, boating and trucking relationships, which is more than double the
figure reported in the first quarter.
Conference Call Information:
SIRIUS will hold a conference call today at 10am ET to discuss operating and
financial results with Wall Street analysts. The public, members of the
investment community and the press will have live access to the conference call
via the company's website www.sirius.com and on the Sirius service by tuning to
SIRIUS Channel 131. A replay of the call will also be available on our website
for 10 days.
SECOND QUARTER 2004 VERSUS SECOND QUARTER 2003
For the second quarter of 2004, SIRIUS recognized total revenue of $13.2
million, compared to $2.1 million for the second quarter of 2003. SIRIUS
reported a loss from operations of $(133.0) million for the second quarter of
2004, compared to a loss from operations of $(109.8) million for the second
quarter of 2003. Adjusted loss from operations for the quarter was $(97.3)
million compared to adjusted loss from operations of $(86.5) million for the
second quarter of 2003 (refer to reconciliation table of loss from operations to
adjusted loss from operations).
SIRIUS reported a net loss applicable to common stockholders of $(136.8)
million, or $(0.11) per share, for the second quarter of 2004, compared with a
net loss applicable to common stockholders of $(111.8) million, or $(0.12) per
share, for the second quarter of 2003.
For the second quarter of 2004, average monthly revenue per subscriber, or ARPU,
was $10.54. Excluding the effects of mail-in rebate programs, ARPU for the
second quarter of 2004 was $10.90.
SIRIUS maintains a strong cash position, ending the second quarter with $640
million in cash, cash equivalents, and marketable securities. Cash flow from
operating activities for the quarter was $(64.8) million compared to cash flow
from operating activities of $(64.6) million for the second quarter of 2003.
(Selected financial information follows).
SIRIUS defines adjusted loss from operations as loss from operations before
depreciation expense, non-cash stock compensation expense, and expense for
equity securities granted to third parties. Adjusted loss from operations is not
a measure of financial performance under accounting principles generally
accepted in the United States. SIRIUS believes adjusted loss from operations is
useful to investors because it represents operating expenses of the company
excluding the effects of non-cash items. Because adjusted loss from operations
is not a measurement determined in accordance with accounting principles
generally accepted in the United States and is thus susceptible to varying
calculations, adjusted loss from operations as presented may not be comparable
to other similarly titled measures of other companies 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 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
the negative margin on equipment sales. SAC is not a measure of financial
performance under accounting principles generally accepted in the United States.
Sirius Satellite Radio Inc.
Financial Highlights
(In thousands, except per
share data)
(Unaudited)
For the Three Months Ended For the Six Months Ended
June 30, June 30,
-------------------------- ------------------------
2004 2003 2004 2003
---- ---- ---- ----
Statement of Operations:
Subscriber revenue, including effects of
mail-in rebates $ 12,950 $ 2,029 $ 22,152 $ 3,583
Advertising revenue, net of agency fees 130 27 150 44
Equipment revenue 140 -- 190 --
Other revenue 10 17 29 37
--------- --------- --------- ---------
Total revenue 13,230 2,073 22,521 3,664
--------- --------- --------- ---------
Operating expenses:
Cost of services:
Satellite and transmission 8,183 7,688 16,595 15,555
Programming and content 11,185 7,639 20,363 14,213
Customer service and billing 4,529 16,320 8,389 18,522
Cost of equipment 405 -- 469 --
Sales and marketing 41,358 28,680 76,311 60,166
Subscriber acquisition costs 34,711 9,273 61,692 21,137
General and administrative 11,420 12,464 19,289 21,558
Research and development 6,045 6,467 11,774 13,440
Depreciation expense 23,583 23,463 47,271 47,563
Non-cash stock compensation
expense (benefit) 4,796 (123) 12,861 436
--------- --------- --------- ---------
Total operating expenses 146,215 111,871 275,014 212,590
--------- --------- --------- ---------
Loss from operations (132,985) (109,798) (252,493) (208,926)
Other income (expense):
Debt restructuring -- -- -- 256,538
Interest and investment income 1,946 1,327 3,615 2,670
Interest expense (5,269) (3,365) (28,968) (22,030)
Other income 71 -- 71 --
--------- --------- --------- ---------
Total other income (expense) (3,252) (2,038) (25,282) 237,178
(Loss) income before income taxes (136,237) (111,836) (277,775) 28,252
Income tax expense (560) -- (3,081) --
--------- --------- --------- ---------
Net (loss) income (136,797) (111,836) (280,856) 28,252
Preferred stock dividends -- -- -- (8,574)
Preferred stock deemed dividends -- -- -- (79,634)
--------- --------- --------- ---------
Net loss applicable to common
stockholders $(136,797) $(111,836) $(280,856) $ (59,956)
========= ========= ========= =========
Net loss per share applicable to
common stockholders (basic and
diluted) $ (0.11) $ (0.12) $ (0.23) $ (0.09)
========= ========= ========= =========
Weighted average common shares
outstanding (basic and diluted) 1,235,920 931,720 1,226,764 631,421
========= ========= ========= =========
Sirius Satellite Radio Inc.
Financial Highlights
(In thousands)
(Unaudited)
As of June 30, As of Dec 31, 2003
2004
------------------- -------------------
Selected Balance Sheet Data:
Cash, cash equivalents and marketable
securities $ 639,599 $ 549,883
Restricted investments 92,115 8,747
Working capital 545,912 497,661
Total assets 1,800,871 1,617,317
Long-term debt 426,037 194,803
Total liabilities 573,525 292,123
Accumulated deficit (1,434,550) (1,153,694)
Stockholders' equity 1,227,346 1,325,194
The following table reconciles GAAP loss from operations to adjusted loss from
operations:
For the Three Months Ended For the Six Months Ended
June 30, June 30,
------------------------------------ ------------------------------------
2004 2003 2004 2003
----------------- --------------- ---------------- ----------------
GAAP loss from operations, as reported $(132,985) $(109,798) $(252,493) $(208,926)
Depreciation expense 23,583 23,463 47,271 47,563
Non-cash stock compensation expense
(benefit) 4,796 (123) 12,861 436
Expense for equity securities granted to
third parties included in:
Programming and content 780 -- 1,268 --
Sales and marketing 6,291 5 15,563 6
General and administrative 88 -- 88 --
Research and development 128 -- 128 --
----------------- --------------- ---------------- ----------------
Adjusted loss from operations $(97,319) $(86,453) $(175,314) $(160,921)
================= =============== ================ ================
Sirius Satellite Radio Inc.
Financial Highlights
(In thousands)
(Unaudited)
For the Six Months Ended
June 30,
------------------------------
2004 2003
------------ ---------------
Statements of Cash Flows:
Cash flows from operating activities:
Net (loss) income $(280,856) $ 28,252
Adjustments to reconcile net (loss) income
to net cash used in operating
activities:
Depreciation expense 47,271 47,563
Non-cash interest expense 20,595 2,188
Non-cash stock compensation expense 12,861 436
Loss on disposal of assets 19 14,465
Non-cash gain associated with debt
restructuring -- (261,275)
Costs associated with debt restructuring -- 4,737
Expense for equity securities granted to third
parties 17,047 6
Increase (decrease) in cash and cash
equivalents resulting from changes in
assets and liabilities:
Marketable securities (92) (1,185)
Prepaid expenses and other assets (4,978) 6,216
Accounts payable and accrued expenses 29,474 7,325
Accrued interest 2,876 13,007
Deferred revenue 17,968 2,509
Other long-term liabilities 1,106 --
--------- ---------
Net cash used in operating activities (136,709) (135,756)
--------- ---------
Cash flows from investing activities:
Additions to property and equipment (10,340) (10,179)
Sale of property and equipment 28 --
Purchases of restricted investments (85,000) --
Maturities of available-for-sale securities 25,000 150,000
--------- ---------
Net cash (used in) provided by investing
activities (70,312) 139,821
--------- ---------
Cash flows from financing activities:
Proceeds from issuance of common stock, net -- 342,659
Proceeds from issuance of long-term debt, net 293,600 194,224
Proceeds from exercise of options 6,682 --
Proceeds from exercise of warrants 19,850 --
Costs associated with debt restructuring -- (4,737)
Other (67) (51)
--------- ---------
Net cash provided by financing activities 320,065 532,095
--------- ---------
Net increase in cash and cash equivalents 113,044 536,160
Cash and cash equivalents at the beginning
of the period 520,979 18,375
--------- ---------
Cash and cash equivalents at the end
of the period $ 634,023 $ 554,535
========= =========
Sirius Satellite Radio Inc.
Quarterly Data
(Unaudited)
Q2 2004 Q1 2004 Q4 2003 Q3 2003 Q2 2003 Q1 2003
------- ------- ------- ------- ------- -------
Subscribers:
Beginning subscribers 351,663 261,061 149,612 105,186 68,059 29,947
Net additions 128,678 90,602 111,449 44,426 37,127 38,112
------- ------- ------- ------- ------- -------
Ending subscribers 480,341 351,663 261,061 149,612 105,186 68,059
Retail 344,349 263,164 197,650 110,821 77,713 51,969
OEM and Special Markets 111,145 63,493 39,400 15,358 7,630 4,252
Hertz 24,847 25,006 24,011 23,433 19,843 11,838
Q2 2004 Q1 2004 Q4 2003 Q3 2003
------------ ------------ ------------ ------------
Monthly ARPU:
Average monthly revenue per subscriber $11.19 $11.68 $11.99 $12.09
Effect of Hertz subscribers (0.29) (0.62) (1.19) (1.78)
------ ------ ------ ------
ARPU before effects of mail-in rebates $10.90 $11.06 $10.80 $10.31
Effect of mail-in rebates (0.36) (1.14) (2.21) 0.89
------ ------ ------ ------
Reported ARPU $10.54 $9.92 $8.59 $11.20
Average monthly revenue per Hertz
subscriber $6.50 $5.17 $2.65 $2.12
SAC:
Total SAC per gross add $234 $248 $222 $522
- -----------------------------------------------------------------------------------------------------
About SIRIUS
SIRIUS, now available to over 10 million DISH Network satellite TV and SIRIUS
Satellite Radio subscribers, provides listeners with over 120 channels of the
best commercial-free music, sports, information and entertainment, with digital
quality sound coast-to-coast, broadcast daily from New York City, Los Angeles,
Nashville, New Orleans, Houston and Daytona. SIRIUS offers 65 channels of 100%
commercial-free music, featuring multiple categories of pop, rock, country,
hip-hop, R&B, dance, jazz, classical and Latin music, along with more than 50
channels of world-class sports, news, talk entertainment, traffic and weather
for a monthly subscription fee of only $12.95, with greater savings for upfront
payments of multiple months or a year or more. SIRIUS also broadcasts live
play-by-play games of the NHL and the NFL, and is the official satellite radio
partner of the NFL.
SIRIUS Satellite Radio products for the car, truck, home, RV and boat are
manufactured by Alpine, Audiovox, Blaupunkt, Clarion, Eclipse, Jensen, JVC,
Kenwood, Panasonic and U.S. Electronics, and can be purchased at major retailers
including Advance Auto Parts, Best Buy, Car Toys, Circuit City, Crutchfield,
Good Guys, Wal-Mart, Sears, Tweeter and Ultimate Electronics, along with
RadioShack and DISH Network outlets.
SIRIUS' exclusive automotive partners DaimlerChrysler, Ford and BMW represent
over 40% of new cars and light trucks sold annually in the United States.
Automotive brands currently offering SIRIUS radios in select new car models
include BMW, MINI, Chrysler, Dodge, Jeep(R), Nissan, Infiniti, Mazda, Audi,
Ford, Lincoln-Mercury, Mercedes-Benz, Porsche and Volkswagen. Automotive brands
that have announced plans to offer SIRIUS radios in select models include
Jaguar, Volvo, Land Rover and Aston Martin. In 2004, SIRIUS radios are expected
to be available in over 80 different car models, with more than 50 of them
factory programs. Also, Hertz currently offers SIRIUS in 29 vehicle models at 53
major locations around the country. In addition, the Penske companies - Penske
Auto Group, United Auto Group and Penske Trucking - are offering SIRIUS radios
as a factory installed option, where available, in their cars and trucks through
their dealerships.
Genmar Holdings, the world's largest manufacturer of recreational boats, Formula
Boats and Winnebago, the leading supplier of recreational vehicles and motor
homes, also 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, 2003 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:
Ron Rodriques
SIRIUS
Public Relations
212.584.5192
rrodrigues@siriusradio.com
Thomas Meyer
PR21 for SIRIUS
Media Relations
310.566.2285
Thomas.Meyer@pr21.com
Jaymie VanValkenburgh
SIRIUS
Investor Relations
212.584.5158
jvalkenburgh@siriusradio.com
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