- Subscribers Reach New High of 20.6 Million; 373,000 Net Subscriber Additions in First Quarter
- Revenue of $724 Million, Up 9% Over First Quarter 2010
- Record Adjusted EBITDA of $181 Million, Up 15% Over First Quarter 2010
- Free Cash Flow Improves $110 Million Year-Over-Year

Sirius XM Radio today announced first quarter 2011 results, including revenue of $724 million, up 9% over first quarter 2010 revenue of $664 million, and adjusted EBITDA of $181 million, up 15% from $158 million in the first quarter of 2010.

“SiriusXM’s first quarter results have put us on track to attain our full year goals for subscriber, revenue, and adjusted EBITDA growth. Significantly, we are now in a position to raise our free cash flow estimate for the year,” said Mel Karmazin, Chief Executive Officer, SiriusXM. “Consumers are buying cars again and demand for our product is strong. Were it not for the OEM supply chain uncertainty resulting from the tragedy in Japan, we would be in a position to raise our subscriber guidance today.”

Other highlights from the quarter include:

• Subscriber growth accelerates. Strong auto sales drove net subscriber additions in the first quarter of 2011 to 373,064, up 118% from 171,441 in the first quarter of 2010. Ending subscribers as of March 31, 2011 were 20,564,028, up 9% from the 18,944,199 subscribers reported as of March 31, 2010.
• SAC improves. Subscriber acquisition cost (SAC) per gross subscriber addition was $57 in the first quarter of 2011, a 3% improvement from the $59 reported in the first quarter of 2010.
• Churn stable. Average self-pay monthly customer churn was 2.0% in the first quarter 2011, in-line with the first quarter 2010 monthly average of 2.0%.

“We operate in a highly competitive audio entertainment marketplace, where there are more choices than ever before, yet consumers continue to choose SiriusXM. We continue to invest in content, expand distribution and improve our technology to deliver the most compelling value proposition possible to consumers across the country,” Karmazin added.

Free cash flow in the first quarter of 2011 was ($17) million, a $110 million improvement from the ($127) million recorded in the first quarter 2010. These improvements were driven by declines in satellite capital expenditures and improved adjusted EBITDA. Net income in the first quarters of 2011 and 2010 was $78 million and $42 million, respectively, or $0.01 per diluted share in each period.

“We ended the first quarter with $434 million of cash and cash equivalents after deploying approximately $135 million to repurchase debt. In April, we repurchased approximately $74 million of our 3.25% Convertible Notes due 2011 via a cash tender offer,” said David Frear, SiriusXM’s Executive Vice President and Chief Financial Officer.  ”We continue to make progress toward reaching our leverage target. Our net debt to adjusted EBITDA declined to 4.1x at the end of the first quarter of 2011 from 6.6x at the end of the first quarter of 2010.”

The discussion of adjusted EBITDA excludes the effects of stock-based compensation and certain purchase price accounting adjustments. A reconciliation of non-GAAP items to their nearest GAAP equivalent is contained in the financial supplements included with this release.

2011 GUIDANCE

In 2011, we continue to expect full-year revenue of approximately $3 billion. Our adjusted EBITDA projection remains at approximately $715 million. Full year self-pay churn and conversion rates for 2011 should be broadly similar to those seen in 2010, and we continue to expect to grow our net new subscribers by 1.4 million in 2011. Free cash flow in 2011 should approach $350 million as compared to previous guidance for free cash flow approaching $300 million.

Click here to read the rest of the First Quarter 2011 Results.

SIRIUS XM Radio today announced third quarter 2010 financial and operating results, including:

• Adjusted revenue of $722.5 million in the third quarter 2010, up 15% from the third quarter 2009 adjusted revenue of $629.6 million;
• Adjusted EBITDA of $169.7 million in the third quarter 2010, an increase of 60% over the third quarter 2009 adjusted EBITDA of $106.1 million;
• Free cash flow of $62.0 million, a 132% increase from $26.7 million in the third quarter of 2009;
• Net subscriber additions of 334,727 in the third quarter of 2010 compared to 102,295 in the third quarter of 2009; and
• Net income (loss) attributable to common stockholders for the third quarter of 2010 and 2009 was $67.6 million and ($151.5) million, respectively, or $0.01 and ($0.04) per diluted share.

The discussion of adjusted operating results, including adjusted revenue and adjusted EBITDA, excludes the effects of stock-based compensation and certain purchase price accounting adjustments.  A reconciliation of the non-GAAP items to their nearest GAAP equivalent is contained in the financial supplements included with this release.

“We continued our positive momentum in the third quarter, improved our churn and conversion rates, and attained a record high subscriber count.  We delivered record adjusted revenue and adjusted EBITDA, increased our free cash flow, and we are now raising our financial guidance for the full year,” said Mel Karmazin, Chief Executive Officer, SIRIUS XM.

Karmazin added, “We will continue to increase and diversify our content offerings with new shows, new celebrity hosts and specialty programming with fantastic appeal to new and existing subscribers.  By growing subscribers and revenue, tightly managing costs, and improving our balance sheet, we are positioned well for long term free cash flow growth.”

SIRIUS XM ended third quarter 2010 with 19,862,175 subscribers, an increase of more than 1.3 million subscribers compared to the end of the third quarter 2009. Net subscriber additions of 334,727 in the third quarter of 2010 improved from 102,295 subscribers in the third quarter of 2009.  In the third quarter 2010, average revenue per subscriber (ARPU) was $11.81, an increase of 6% from ARPU of $11.09 in the third quarter 2009.  The company’s self-pay monthly customer churn rate was 1.9% in the third quarter 2010, as compared with a self-pay monthly customer churn rate of 2.0% in the third quarter 2009.  The conversion rate of trial subscribers into self-pay subscribers climbed to 48.1% in the third quarter 2010, up from 46.2% in the third quarter of 2009.  Subscriber acquisition cost (SAC) per gross addition was $59 in the third quarter 2010, a 14% improvement from $69 in the third quarter 2009.

On a GAAP basis, net income (loss) attributable to common stockholders for the third quarter of 2010 and 2009 was $67.6 million and ($151.5) million, respectively, or $0.01 and ($0.04) per diluted share, on revenue of $717.5 million and $618.7 million, respectively.  The company’s reported net income (loss) attributable to common stockholders included losses on extinguishment of debt in the third quarter of 2010 and 2009 of $0.3 million and $138.1 million, respectively.  For the nine months ended September 30, 2010 and 2009, net income (loss) attributable to common stockholders was $124.5 million and($550.0) million, respectively, or $0.02 and ($0.15) per diluted share, on revenue of $2.08 billion and $1.80 billion, respectively.

In October, XM completed an offering of $700 million of 7.625% Senior Notes due 2018.  XM used a portion of the proceeds of the offering to repurchase $489,065,000 aggregate principal amount of its outstanding 11.25% Senior Secured Notes due 2013 pursuant to its previously announced tender offer and consent solicitation.

INCREASED 2010 OUTLOOK

The company projects full-year 2010 adjusted EBITDA of approximately $600 million versus previous guidance of approximately $575 million.  The company now expects adjusted revenue for 2010 will exceed $2.8 billion and free cash flow will exceed $150 million.  SIRIUS XM expects to end the year with approximately 20.1 million subscribers, consistent with its increase in subscriber guidance on October 1, 2010.

You can read the full 2010 financial results here.

Also disappointing is that there was no update on Stern’s situation with Sirius XM, Mel Karmazin could only state that they are “no updates at this time ”. Sterns contract with Sirius XM ends in December.

SIRIUS XM announced that it plans to release second quarter 2010 financial and operating results on Wednesday, August 4, 2010.

SIRIUS XM will hold a conference call at 8:00 am ET on Wednesday, August 4, 2010 to discuss these results. Investors and the press can listen to the conference call via the company’s website, www.sirius.com, and on its satellite radio service by tuning to SIRIUS channel 126 or XM channel 90.

A replay of the call will be available on www.sirius.com.

SIRIUS XM Radio today announced first quarter 2010 financial and operating results, including $670.6 million in pro forma revenue, up 11% over first quarter 2009 pro forma revenue of $605.5 million; and $157.8 million in first quarter 2010 pro forma adjusted income from operations, an increase of 45% over first quarter 2009 pro forma adjusted income from operations of $108.8 million.

“Continued positive subscriber growth, double-digit growth in revenue, and a sharp focus on costs resulted in the highest quarterly adjusted operating income in the company’s history,” said Mel Karmazin, Chief Executive Officer, SIRIUS XM Radio. “As the leader in audio entertainment, these results show the tremendous appeal of our service and the strength of our business model. The continuing recovery of the automotive sector and expanding signs of increased consumer spending are encouraging signs for the company’s growth prospects.”

SIRIUS XM ended first quarter 2010 with 18,944,199 subscribers, up 344,765 from 18,599,434 subscribers at the end of first quarter 2009. Net subscriber additions of 171,441 in the first quarter of 2010 improved significantly from a loss of 404,422 subscribers in the first quarter of 2009. In the first quarter 2010, pro forma average revenue per subscriber (ARPU), which includes the U.S. Music Royalty Fee, was $11.48, an increase of 10% from pro forma ARPU of $10.48 in the first quarter 2009. The company’s self-pay monthly customer churn rate was 2.0% in the first quarter 2010, as compared with self-pay monthly customer churn of 2.2% in the first quarter 2009.

Free cash flow in the first quarter 2010 was ($127.2) million compared to ($3.6) million in the first quarter of 2009. Net Income plus non cash operating activities increased by $43.7 million, or 89%, to $93 million in the first quarter of 2010 from $49.3 million in the first quarter of 2009. This increase was offset by changes in operating assets and liabilities as a result of the early repayment of approximately $61 million deferred in 2009 that was scheduled to be repaid, at 15% interest, in monthly installments from April 2010 through March 2011, a lump sum programming payment in the first quarter of 2010 that was paid over the course of the year in 2009 and the payment of 2009 bonuses in cash as opposed to stock in the prior year resulting in an increase in net cash used in operating activities of $104.6 million. In addition, capital expenditures in the first quarter of 2010 increased by $28 million over the prior quarter period primarily due to increased satellite spending.

The company previously announced it will redeem all of the remaining $114 million of XM’s outstanding 10% Senior PIK Secured Notes due 2011 on Tuesday, June 1, 2010. “Our strong cash position, strong year-to-date subscriber growth and the improving outlook for the economy have put us in position to retire $175 million of high cost obligations a year ahead of schedule,” said David Frear, SIRIUS XM’s Chief Financial Officer. “The early retirement of the PIK Notes and the deferred payments will reduce interest expense and increase our free cash flow.”

On a GAAP basis, first quarter 2010 revenue was $663.8 million, and first quarter 2010 net income was $41.6 million, or $0.01 per share.

2010 OUTLOOK

SIRIUS XM continues to project net subscriber additions of over 500,000 for the full year. The company continues to expect to record over $2.7 billion of pro forma revenue in 2010 and to achieve pro forma adjusted income from operations of approximately $550 million. Free cash flow is expected to remain positive for the full year.

PRO FORMA RESULTS OF OPERATIONS

The discussion of operating results below is based upon pro forma comparisons as if the merger of SIRIUS and XM occurred on January 1, 2007 and excludes the effects of stock-based compensation and purchase accounting adjustments.

FIRST QUARTER 2010 VERSUS FIRST QUARTER 2009

For the first quarter of 2010, SIRIUS XM recognized total revenue of $670.6 million compared to $605.5 million for the first quarter 2009. This 11%, or $65.1 million, increase in revenue was driven by the U.S. Music Royalty Fee introduced in the third quarter of 2009, the sale of “Best of” programming, and rate increases to the company’s multi-subscription and Internet packages.

Total ARPU for the three months ended March 31, 2010 was $11.48, compared to $10.48 for the three months ended March 31, 2009. The increase was driven mainly by the addition of the U.S. Music Royalty Fee introduced in July 2009 and increased revenues from the “Best of” programming, multi-subscription rate increases, Internet streaming, and advertising.

In the first quarter of 2010, the company grew pro forma adjusted income from operations to $157.8 million compared to pro forma adjusted income from operations of $108.8 million for the first quarter of 2009 (refer to the reconciliation table of net income (loss) to adjusted income from operations). The improvement was driven by an 11% increase in total revenue, or $65.1 million, partially offset by an increase of 3%, or $16.2 million, in total expenses included in adjusted income from operations.

Revenue share and royalties increased 2%, or $2.3 million, in the three months ended March 31, 2010 compared to the three months ended March 31, 2009 primarily due to an increase in the company’s revenues and an increase in the statutory royalty rate for the performance of sound recordings. The amounts were partially offset by a decrease in a royalty rate with an automaker.

Programming and content costs decreased 6%, or $6.2 million, in the three months ended March 31, 2010 compared to the three months ended March 31, 2009 due mainly to savings on certain content agreements and production costs, partially offset by increases in personnel costs and general operating expenses.

Customer service and billing costs decreased 7%, or $4.1 million, in the three months ended March 31, 2010 compared to the three months ended March 31, 2009 primarily due to lower call center expenses as a result of savings realized from relocating certain operations.

Satellite and transmission costs decreased 2%, or $0.4 million, in the three months ended March 31, 2010 compared to the three months ended March 31, 2009 due to reductions in personnel costs and repeater maintenance costs, partially offset by increased satellite insurance expense.

Cost of equipment decreased 1%, or $0.1 million, in the three months ended March 31, 2010 compared to the three months ended March 31, 2009 as a result of lower inventory write-downs, partially offset by increased component sales to manufacturers and distributors.

Subscriber acquisition costs increased 28%, or $23.3 million, in the three months ended March 31, 2010 compared to the three months ended March 31, 2009. The increase was driven by the 29% increase in gross additions and higher OEM installations, partially offset by lower per unit OEM subsidies, improved chip set costs and lower aftermarket acquisition costs.

Sales and marketing costs decreased 1%, or $0.7 million, in the three months ended March 31, 2010 compared to the three months ended March 31, 2009 due to lower cooperative marketing, event marketing and third party distribution support expenses, partially offset by increased personnel costs and consumer advertising.

Engineering, design and development costs increased 17%, or $1.4 million, in the three months ended March 31, 2010 compared to the three months ended March 31, 2009 mainly due to higher personnel costs.

General and administrative costs increased 1%, or $0.5 million, in the three months ended March 31, 2010 compared to the three months ended March 31, 2009 mainly due to higher personnel costs, partially offset by lower legal, consulting and accounting expenses.

Other expenses decreased 17%, or $16.9 million, in the three months ended March 31, 2010 compared to the three months ended March 31, 2009 driven mainly by a decrease in loss on extinguishment of debt and credit facilities, net, of $15.4 million.

To read the rest of the report in full detail click Here.