Wednesday, November 08, 2006
Conference Call Quotes - Sirius Q3
November 8, 2006
Conference Calls always cover a lot of ground. Sometimes important statements get lost in the shuffle. Below are some highlighted statements from the Sirius Q3 Conference Call:
MEL KARMAZIN“In the last 12 months, Sirius has added nearly 3 million new subscribers.”
“last year in the third quarter of '05 we attracted 37% share of net additions and each quarter since then, Sirius has attracted the majority of net additions, with third quarter '06 reaching 61% total share of satellite radio net adds. That is a 24 percentage point increase in our market share in just 12 months.”
“We ended third quarter '06 with 135% more subscribers than we had at the end of Q3 '05.”
“We told you that we would double the number of OEM subs this year and I'm pleased to report that we have virtually accomplished that goal, after just nine months, with OEM subscribers up 95% year to date.”
“Our ARPU in the quarter was $11.17, with advertising ARPU contributing $0.49 versus $0.26 last year, reflecting advertising growth even greater than subscriber growth. Our advertising ARPU for the first nine months of the year is approximately 45 % greater than our competitor. We have almost $30 million on our books for '06 for advertising as compared to finishing '05 at approximately $6 million.”
“Most importantly for me is that Sirius continues to deliver on our business plan. We reiterate today that we will be free cash flow positive for the full year of '07 and could be free cash flow positive as early as this current quarter.”
“Another example of how well Sirius is accepted is that we are, by a wide margin, the number one satellite radio company in Canada, where unlike the U.S., both satellite radio companies started signing up subscribers at the same time.”
"We will have ample availability throughout the distribution channels of our best-ever products and accessories. We are expecting a big reaction from NASCAR fans, as we kickoff our five-year relationship to begin in January '07. You should also assume that we will do our best to marshal our over 5 million subscribers to give Sirius as holiday gifts."
“Lastly, it's worth repeating to say that Sirius will continue to pursue only those business strategies designed to produce long-term growth in shareholder value. We will stick to our plan and not overspend to gain subscribers or market share.”
JIM MEYER
“Let me start with some overall comments. As previously mentioned, Sirius’ total market share of net additions was 61% in the third quarter, up from 37% net add share a year ago”
“Fortunately, all of our products have now been recertified by the FCC and we now have an effective solution for FM modulation using a rather straightforward and easy to use passive radiator solution, otherwise known as a directional antenna. We expect this will provide the DIY an easy, cost-effective solution.”
“We have now begun taking delivery of our fourth generation chipset. This innovative new chipset from ST Microelectronics allows for a significant reduction in both power requirements and in product costs. We will begin integrating the new gen-4 platform into products in the first quarter of 2007, and we are very excited about the product possibilities and lower costs that this new chipset will allow.”
“Chrysler group is now targeting a 40% overall penetration rate for the 2007 model year with their Sirius factory programs, up from approximately 30% in the 2006 model year”
“In the coming days, look for some major advertising from the Chrysler Group that prominently features Sirius in association with Chrysler, Jeep and Dodge vehicles.”
“Ford is also on track to offer Sirius as factory-installed options in 21 vehicle lines by early calendar year 2007, up from four models at the beginning of 2006.”
“Audi VW is targeting at 80% installation rate in their 2007 vehicle lines. Mitsubishi announced that it would begin to offer Sirius as a standard feature or factory option on four models in the fall of '06 and throughout its entire line in the 2008 model year.”
“A radio with a three-month subscription is now under $100. Even a full year subscription with a radio is under $200, making satellite radio a tremendous great gift opportunity.”
SCOTT GREENSTEIN
“Sirius continued to deliver on our claim of being the best radio on radio, and when we launched Sirius Internet Radio this quarter, we became the best radio on the Internet.”
“We made Howard available worldwide for the first time ever.”
“We experienced success well beyond internal expectations, with traffic to Sirius.com and HowardStern.com spiking during the week. For those who questioned Howard's draw, this should lay it to rest. We heard from servicemen on aircraft carriers and listeners from the four corners of the world calling into his show and other shows on Sirius that day.”
“Among the many accolades surrounding our no radio required internet offering, one prominent writer said within minutes, I remember just why and just how much I missed hearing Stern on my radio. As everyone knows, Howard made a huge impact for us last year, but it's important to note that Ad Age recently stated with regard to the free Howard trial, that traffic to Sirius.com was up 201% versus the same day a year ago.”
“We are unrelenting in meeting our goal of giving listeners the most inspiring, entertaining, informative and irresistible content anywhere on radio”
“We continue to add to our range of programming for family, women and niches of interest and we are adding content continually and weighing what our subscribers will enjoy, while never losing sight of Sirius’ overall goal of reaching cash flow positive.”
“Advertisers want to be where the listeners are. They want to be where the best programming on radio is and where the heat and buzz are generated. For the first nine months of the year, we have booked $22.7 million in revenue and as Mel mentioned, approaching $30 million compared to $3.1 million through 3Q05. That's a 632% increase in ad revenue year-over-year. No other medium can come even close to posting those numbers in advertising growth.”
DAVID FREAR
“The 441,000 net new subscribers Sirius added in the third quarter represents our fourth consecutive quarter of market share leadership in the one key performance metric that translates directly into revenue growth.”
“We have promised you a clear focus on free cash flow and as you will see, every key financial measure has shown substantial improvement.”
“Cost of services has dropped from 62% of revenues to 50%, fully absorbing and then some, the effect of adding Howard Stern to our line-up this year.”
“Our adjusted loss from operations, or adjusted EBITDA, improved by $43 million sequentially to a loss of $83 million, considerably better than Street expectations”
“Total churn, including self-paid subs and non-conversion of bundled subs in the third quarter was 2% versus the 2.75% The Street calculated for our competitor, up from 1.8% in the year ago third quarter. This increase is wholly attributable to the increase in our OEM subscriber base and the roll-off of non-converting bundled subscriptions. The self pay component of our churn has remained very consistent in the 1.6% to 1.7% range.”
“As Jim and Mel have discussed, our products are approved. We are back in full production, and will have plenty of product in stores for the holidays”
11/08/2006 12:39:00 PM
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