SIRIUS , today
announced its financial results for the year ended December 31, 2002, the end
of the first year of commercial operations for the premier satellite radio
broadcaster. SIRIUS launched its service nationwide on July 1, 2002, and had
29,947 subscribers on December 31, 2002. In addition, on March 7, 2003,
SIRIUS closed a $1.2 billion recapitalization, which eliminated approximately
91% of the company’s debt and 100% of its convertible preferred stock, and
raised $200.0 million of new equity. SIRIUS currently has funds to cover
estimated funding needs into the second quarter of 2004.
FOURTH QUARTER 2002 VERSUS FOURTH QUARTER 2001
For the quarter ended December 31, 2002, SIRIUS reported total
revenue of $685 thousand and a net loss applicable to common stockholders of
$134.1 million, or $1.74 per share. This compares with a net loss applicable
to common stockholders of $83.6 million, or $1.52 per share, for the 2001
quarter.
Subscriber revenue of $727 thousand was partially offset by $107 thousand
of costs associated with a mail-in rebate program. Mail-in rebates that are
paid directly to subscribers are recorded as a reduction to subscription
revenue. Average monthly revenue per subscriber, or ARPU, was approximately
$10.82. ARPU, excluding costs associated with a mail-in rebate program, was
approximately $12.69.
FULL YEAR 2002 VERSUS FULL YEAR 2001
For the year ended December 31, 2002, SIRIUS reported total revenue of
$805 thousand and a net loss applicable to common stockholders of
$468.5 million, or $6.13 per share. This compares with a net loss applicable
to common stockholders of $277.9 million, or $5.30 per share, for 2001.
Subscriber revenue of $1.0 million was offset by $426 thousand of costs
associated with a mail-in rebate program. ARPU was approximately $7.47.
ARPU, excluding costs associated with a mail-in rebate program, was
approximately $12.58.
RECAPITALIZATION
On March 7, 2003, the company completed a series of transactions to
restructure its debt and equity capitalization. As part of these
transactions:
* SIRIUS exchanged 545,012,162 shares of the company’s common stock for
approximately 91% of its outstanding debt, resulting in the
cancellation of all of the company’s Lehman term loans, all of the
company’s Loral term loans, $251.2 million in aggregate principal
amount at maturity of the company’s 15% Senior Secured Discount Notes
due 2007, $169.7 million in aggregate principal amount of the company’s
14-1/2% Senior Secured Notes due 2009, and $14.7 million in aggregate
principal amount of the company’s 8-3/4% Convertible Subordinated Notes
due 2009;
* SIRIUS exchanged 76,992,865 shares of its common stock and warrants to
purchase 87,577,114 shares of common stock for all of the company’s
outstanding convertible preferred stock;
* SIRIUS sold 24,060,271 shares of its common stock to affiliates of
Apollo Management, L.P. for an aggregate of $25.0 million in cash;
* SIRIUS sold 24,060,271 shares of its common stock to affiliates of The
Blackstone Group L.P. for an aggregate of $25.0 million in cash; and
* SIRIUS sold 163,609,837 shares of its common stock to affiliates of
OppenheimerFunds, Inc. for an aggregate of $150.0 million in cash.
After giving effect to these transactions, at March 7, 2003, SIRIUS had
$61.2 million in aggregate principal amount of outstanding debt, consisting of
$29.2 million in aggregate principal amount at maturity of 15% Senior Secured
Discount Notes due 2007, $30.3 million in aggregate principal amount of
14-1/2% Senior Secured Notes due 2009 and $1.7 million in aggregate principal
amount of 8-3/4% Convertible Subordinated Notes due 2009; and approximately
911,479,700 shares of common stock outstanding.
At March 7, 2003, SIRIUS had in excess of $300.0 million in cash, cash
equivalents and marketable securities, an amount sufficient to cover its
estimated funding needs into the second quarter of 2004. The company
estimates that it will need additional funding of approximately $100.0 million
before it achieves cash flow breakeven, the point at which revenues are
sufficient to fund expected operating expenses, capital expenditures,
principal and interest payments and taxes.
SIRIUS defines average monthly revenue per subscriber (“ARPU”) as the
total earned subscription revenue and activation revenue 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 Satellite Radio Inc.
Financial Highlights
(In thousands, except per share and subscriber data)
(Unaudited)
December 31, 2002 December 31, 2001
Select Balance Sheet Data:
Cash, cash equivalents
and marketable securities $173,702 $308,944
Restricted investments,
short-term and long-term 7,200 21,998
Working capital 151,289 275,732
Total assets 1,340,940 1,527,605
Long-term debt, net of current portion 670,357 639,990
Accrued interest, net of current portion 46,914 17,201
Total liabilities 772,941 719,788
Convertible preferred stock 531,153 485,168
Accumulated deficit (927,479) (504,998)
Stockholders' equity 36,846 322,649
For the Quarter Ended For the Year Ended
December 31, December 31,
2002 2001 2002 2001
Statement of Operations:
Subscriber revenue,
net of rebates $620 $-- $623 $--
Advertising revenue,
net of agency fees 35 -- 146 --
Other revenue 30 -- 36 --
Total revenue 685 -- 805 --
Operating expenses:
Cost of services:
Satellite and transmission 13,961 8,339 39,308 31,056
Programming and content 10,621 3,539 22,728 9,836
Customer service and billing 2,283 1,826 7,862 6,572
Sales and marketing 28,511 6,394 108,385 21,566
General and administrative 6,433 9,078 30,682 28,536
Research and development 6,388 9,571 30,087 47,794
Depreciation expense 23,156 2,421 82,747 9,052
Non-cash stock compensation 128 10,670 (7,867) 14,044
Total operating expenses 91,481 51,838 313,932 168,456
Loss from operations (90,796) (51,838) (313,127) (168,456)
Other income (expense):
Expense associated
with restructuring (6,543) -- (8,448) --
Gain on extinguishment of debt -- 5,313 -- 5,313
Interest and investment income 727 2,680 5,257 17,066
Interest expense (25,474) (28,861) (106,163) (89,686)
Total other expense (31,290) (20,868) (109,354) (67,307)
Net loss (122,086) (72,706) (422,481) (235,763)
Preferred stock dividends (11,806) (10,752) (45,300) (41,476)
Preferred stock
deemed dividends (172) (171) (685) (680)
Net loss applicable to
common stockholders $(134,064) $(83,629) $(468,466) $(277,919)
Net loss per share
applicable to common
stockholders
(basic and diluted) $(1.74) $(1.52) $(6.13) $(5.30)
Weighted average common
shares outstanding
(basic and diluted) 77,268 54,981 76,394 52,427
Other data:
Subscribers (end of period) 29,947 -- 29,947 --
About SIRIUS
SIRIUS is the only satellite radio service bringing listeners more than
100 streams of the best music and entertainment coast-to-coast. SIRIUS offers
60 music streams with no commercials, along with over 40 world-class sports,
news and entertainment streams for a monthly subscription fee of $12.95.
Stream Jockeys create and deliver uncompromised music in virtually every genre
to our listeners 24 hours a day. Satellite radio products bringing SIRIUS to
listeners in the car, truck, home, RV and boat are manufactured by Kenwood,
Panasonic, Clarion, Audiovox and Jensen, and are available at major retailers
including Circuit City, Best Buy, Car Toys, Good Guys, Tweeter, Ultimate
Electronics, Sears and Crutchfield. SIRIUS is the premier OEM satellite radio
provider, with exclusive partnerships with DaimlerChrysler, Ford and BMW.
Automotive brands currently offering SIRIUS radios in select new car models
include BMW, Chrysler, Dodge, Jeep®, Nissan and Infiniti. Automotive brands
that have announced plans to start offering SIRIUS in select models include
Ford, Lincoln, Mercury, Mercedes-Benz, Jaguar, Volvo, Mazda, MINI, Audi,
Volkswagen, Land Rover and Aston Martin.
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, 2002 filed with the Securities and Exchange Commission. Among the
key factors that have a direct bearing on our results of operations are: our
need for substantial additional funds before the second quarter of 2004; 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.
