XM Issues Quarterly Report
June 27, 2006
WASHINGTON, July 27 /PRNewswire-FirstCall/ -- XM Satellite Radio Holdings Inc. (Nasdaq: XMSR - News) today reported financial and operating results for the second quarter ended June 30, 2006, and it announced that it recently surpassed seven million subscribers. For the second quarter 2006, XM recorded gross subscriber additions of 926,281 and net subscriber additions of 398,012. XM finished the second quarter 2006 with a total of 6,899,871 subscribers, representing a 56 percent increase over the 4,417,490 subscribers at the end of the second quarter 2005.
"Despite near-term challenges, XM's revenues grew in the second quarter by 82 percent compared to the same quarter last year and we were able to significantly bring down our adjusted EBITDA loss year over year," said Hugh Panero, CEO of XM Satellite Radio. "It's a testament to the appeal of satellite radio that XM recently surpassed 7 million subscribers."Second Quarter Financial Results
For the second quarter 2006, XM reported revenue of approximately $228 million, an increase of 82 percent from the $125 million reported in the second quarter 2005. The quarterly increase in revenue was driven by 56 percent subscriber growth year over year, and increases in average revenue per subscriber. For the second quarter of 2006, XM's subscriber acquisition cost (SAC), a component of cost per gross addition (CPGA) was $64 compared to $50 in the second quarter of 2005. CPGA was $112 compared to $98 in the second quarter of 2005.
XM's net loss for the second quarter of 2006 was $229 million compared to a net loss of $147 million during the second quarter of 2005. The net loss for the second quarter of 2006 includes $105 million in de-leveraging and other non-operating charges that were not incurred during the second quarter of 2005. For the second quarter of 2006, the adjusted EBITDA loss (non-GAAP) improved to $46 million versus an adjusted EBITDA loss of $88 million in the second quarter of 2005. The primary differences between net loss and adjusted EBITDA are non-operating amounts and certain operating non-cash charges. For a full reconciliation of our net loss to adjusted EBITDA, see the attached financial schedules.XM Revises Subscriber Guidance
Based on current marketplace dynamics and regulatory uncertainties concerning 'plug-and-play' radios, XM today also reported a change to its subscriber guidance for 2006, projecting that it will end the year with total subscribers of between 8.2 million and 7.7 million. The company will refine this range at the end of the third quarter when it expects to have a firmer sense of regulatory progress and availability of product for the fourth quarter, as well as retail sales trends. With this revised subscriber guidance, XM still expects to achieve positive cash flow from operations for the fourth quarter 2006 and the full year 2007, although its ability to do so becomes challenging toward the lower end of the subscriber range.Nate Davis Appointed XM President and COO; XM Augments Marketing Team
Nate Davis was recently appointed to the newly-created position of President and Chief Operating Officer at XM. Mr. Davis, who reports to Mr. Panero, is a seasoned telecommunications executive, having served in senior management roles at XO Communications, Nextel and MCI. He continues to serve on XM's Board of Directors, to which he was appointed in 1999. The company has also augmented its sales and marketing team with the appointment of a number of senior-level marketing executives who will report to a Chief Marketing Officer, to be named by Davis in the coming months to oversee all sales and marketing for the company."Oprah & Friends" Channel Offers Preview in Advance of September Launch
In advance of its September 25th launch, the "Oprah & Friends" channel is now broadcasting an on-air preview of programming and personalities on its future home, XM Channel 156. The much-anticipated talk radio channel, exclusive to XM, will feature a broad range of original programming hosted by popular personalities from "The Oprah Winfrey Show" and O, The Oprah Magazine.XM Creates Dedicated Automotive Group
XM recently announced the creation of a dedicated automotive group to focus exclusively on XM's automotive strategic partnerships. The new group is overseen by XM veteran Steve Cook, who was recently named to the role of Executive Vice President, Automotive. XM is the leading provider of satellite-delivered entertainment and data services for the automobile market. XM is available in more than 140 different vehicle models for 2006. 2006 is also a staging year for significant growth in the volume of XM-equipped vehicles in 2007 and 2008, with annual factory installations of XM radios expected to double in the next two years.About XM Satellite Radio
XM is America's number one satellite radio service with more than 7 million subscribers. Broadcasting live daily from studios in Washington, DC, New York City, the Country Music Hall of Fame in Nashville, Toronto and Montreal, XM's 2006 lineup includes more than 170 digital channels of choice from coast to coast: the most commercial-free music channels, sports, talk, comedy, children's and entertainment programming; and the most advanced traffic and weather information.
XM, the leader in satellite-delivered entertainment and data services for the automobile market through partnerships with General Motors, Honda, Toyota, Hyundai, Nissan, Porsche, Suzuki, and Subaru, is available in more than 140 different vehicle models for 2006. XM's industry-leading products are available at consumer electronics retailers nationwide. For more information about XM hardware, programming and partnerships, please visit http://www.xmradio.com.
Factors that could cause actual results to differ materially from those in the forward-looking statements in this press release include demand for XM Satellite Radio's service, the Company's dependence on technology and third party vendors, its potential need for additional financing, as well as other risks described in XM Satellite Radio Holdings Inc.'s Form 10-K filed with the Securities and Exchange Commission on 3-3-06. Copies of the filing are available upon request from XM Radio's Investor Relations Department.Full report HERE
7/27/2006 08:38:00 AM
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