Sirius Earnings Release
Highlights: Reports adjusted earnings of ($0.11) per share vs ($0.15) concensusRevenues rose 187.6% year/year to $150.1 mln vs the $147.4 mln consensus Raises yr end subscriber guidance to 6.3 mln from 6.2 mlnReportsQ2 churn 1.8% vs 1.8% street expectationReports Q2 ARPU $11.16 up from $10.50 in yr ago period vs $11.12 street expectationReports Q2 SAC $113 vs $122 street expectationRaises guidance for FY06, sees FY06 revs of $615 up from prior guidance of over $600 mln consensus.From the company press release:
"SIRIUS Satellite Radio Reports Strong First Quarter 2006 Results
-
Company Increases Year-End Subscriber Guidance to Over 6.2 Million - Revenue Nearly Triples to Over $126 Million - Satellite Radio Leader with 57% of Net Subscriber Additions NEW YORK, May 2, 2006 /PRNewswire-FirstCall via COMTEX News Network/ -- SIRIUS Satellite Radio (Nasdaq: SIRI) today announced strong first quarter 2006 results including record market share of satellite radio net subscriber additions.
(Logo: http://www.newscom.com/cgi-bin/prnh/19991118/NYTH125 )
SIRIUS ended the first quarter with 4,077,747 subscribers, reflecting net subscriber additions of 761,187, a 149% increase in net additions from the year-ago quarter. For the second consecutive quarter, SIRIUS led the satellite radio industry in net subscriber additions.
First quarter 2006 revenue grew to $126.7 million, up 193% from $43.2 million in the year-ago quarter. Advertising revenue increased to a record $7.3 million, representing 53% of total satellite radio industry advertising revenue in the first quarter. Average monthly churn was 1.8%, in line with guidance. Subscriber acquisition costs (SAC) per gross addition were $113 for the first quarter, a 41% improvement over the year-ago quarter.
"SIRIUS led the industry in the first quarter with the majority of satellite radio net additions, while achieving 64% share at retail and strong growth in our OEM channel. Based upon our growth we are pleased to be raising our subscriber guidance for 2006 to over 6.2 million and we continue to believe we could be free cash flow positive as early as the fourth quarter of 2006 and for the full year 2007," said Mel Karmazin, CEO of SIRIUS. "We are also very excited about the launch of our first live wearable radio this summer and our plans to stream The Howard Stern Show via the Internet to SIRIUS subscribers by Father's Day."
During the first quarter, SIRIUS added 534,958 net subscribers from the company's retail channel, a 169% increase from 198,558 net retail subscriber additions in the year-ago quarter. The company also added 225,343 net subscribers from its automotive OEM channel, 109% more than the 107,855 net automotive OEM subscriber additions in the year-ago quarter.
SIRIUS reported a net loss of ($458.5) million, or ($0.33) per share, for the first quarter of 2006, including a ($0.20) per share impact from equity charges, compared to a net loss of ($193.6) million, or ($0.15) per share, in the year-ago quarter, including a ($0.03) per share impact from equity charges. The adjusted net loss per share, or net loss per share excluding equity charges, was ($0.13) in the first quarter 2006 as compared to an adjusted net loss per share of ($0.12) in the first quarter of 2005. (Refer to the reconciliation table of GAAP net loss per share to the adjusted net loss per share).
"This was a great quarter on every front for SIRIUS," added Mel Karmazin. "Non-cash equity charges were the primary reasons for our widening loss over last year and do not impact our free cash flow guidance or our very bright short and long term prospects."
Other Developments
During 2006, SIRIUS reached new exclusive agreements with Kia, Volkswagen, Audi, and Rolls-Royce. SIRIUS will be a standard feature in all 2009 model year Kia vehicles. In the 2007 model year, Volkswagen is expected to include SIRIUS in 80% of its production. SIRIUS is now a standard feature in all Rolls-Royce vehicles sold in the United States.
SIRIUS enhanced its strong programming line-up during the first quarter with new additions including the Howard Stern channels, Playboy Radio, Cosmo Radio, Blue Collar Comedy Radio, FOX News Channels, and a new morning call-in show from Court TV. SIRIUS is the original and only home of 100% commercial free music. Guidance
SIRIUS provided the following guidance for full year 2006 and beyond:
Full Year 2006:
* Over 6.2 million subscribers at year-end
* Average monthly churn of approximately 1.8%
* SAC per gross addition approaching $110
* Total revenue to exceed $600 million
* Adjusted loss from operations of approximately ($565) million,
reflecting the impact on total SAC of more robust subscriber growth
than previously expected
* SIRIUS' first quarter of positive free cash flow, after capital
expenditures, could be reached as early as the fourth quarter of 2006
Longer Term:
* Total revenue for 2007 of approximately $1 billion
* SAC per gross addition for 2007 to decline further from the 2006 level
* Positive free cash flow, after capital expenditures, for full-year 2007
* Total revenue for 2010 of approximately $3 billion
* Free cash flow for 2010, after capital expenditures, of approximately
$1 billion
Conference Call Information:
SIRIUS will hold a conference call today at 8 am ET to discuss operating and financial results. 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 125. A replay of the call will also be available on the SIRIUS website.
FIRST QUARTER 2006 VERSUS FIRST QUARTER 2005
For the first quarter of 2006, SIRIUS recognized total revenue of $126.7 million compared with $43.2 million for the first quarter of 2005. This 193%, or $83.5 million, increase in revenue was primarily driven by a $73.3 million increase in subscriber revenue resulting from the net increase in subscribers of 2,629,052, or 181%, from March 31, 2005 to March 31, 2006, and a $6.8 million increase in advertising revenue.
The company's adjusted loss from operations increased by ($9.6) million to ($136.7) million for the first quarter of 2006 from ($127.1) million for the first quarter of 2005 (refer to the reconciliation table of GAAP loss from operations to adjusted loss from operations). This increase was driven by a 63%, or $42.1 million, increase in subscriber acquisition costs reflecting higher shipments of SIRIUS radios and chip sets and increased commissions to support a 171% increase in gross subscriber additions from 354,708 for the first quarter of 2005 to 960,610 for the first quarter of 2006. This increase was offset by reductions in hardware subsidy rates as the company continued to reduce manufacturing and chip set costs. The increase in subscriber acquisition costs was more than offset by a 175%, or $73.3 million, increase in subscriber revenue as a result of a 181% increase in the company's subscriber base.
Programming and content expenses increased by $32.1 million to $56.4 million for the first quarter of 2006 from $24.3 million for the first quarter of 2005. The increase was primarily attributable to license fees and consulting costs associated with new programming, and broadcast royalties.
Customer service and billing expenses increased by $6.3 million to $15.8 million for the first quarter of 2006, from $9.5 million for the first quarter of 2005. The increase was primarily attributable to call center operating costs necessary to accommodate the increase in the company's subscriber base. Customer service and billing expenses per average subscriber per month declined 42% to $1.40 for the first quarter of 2006 from $2.40 for the first quarter of 2005.
Sales and marketing expenses increased by $4.2 million to $39.3 million for the first quarter of 2006 from $35.1 million for the first quarter of 2005. The increase was primarily attributable to higher distribution and compensation related costs, offset by decreases in advertising costs.
During the first quarter of 2006, the company also had increases in general and administrative expenses and engineering, design and development expenses. General and administrative expenses increased $4.3 million to $19.1 million for the first quarter of 2006 from $14.8 million for the first quarter of 2005 primarily as a result of overhead expansion to support the growth of the business. Engineering, design and development expenses increased $1.0 million to $12.7 million for the first quarter of 2006 from $11.7 million for the first quarter of 2005 primarily as a result of costs associated OEM tooling and manufacturing upgrades for SIRIUS factory installations.
For the first quarter of 2006, the company recorded ($4.4) million for its share of SIRIUS Canada, Inc.'s net loss.
SIRIUS reported a net loss of ($458.5) million, or ($0.33) per share, for the first quarter of 2006, including a ($0.20) per share impact from equity charges, compared to a net loss of ($193.6) million, or ($0.15) per share, in the year-ago quarter, including a ($0.03) per share impact from equity charges. The adjusted net loss per share, or net loss per share excluding equity charges, was ($0.13) in the first quarter 2006 as compared to an adjusted net loss per share of ($0.12) in the first quarter of 2005. (Refer to the reconciliation table of GAAP net loss per share to the adjusted net loss per share)...."(More:
HERE)
8/01/2006 07:28:00 AM
SSG Has Merged. You Can Read All Of The Latest SSG Content By Clicking Here
0 Comments:
SSG is not a Financial Advisor. Read Disclosure: HERE
--------------------------------------------------------
