SIRIUS is one of the fastest growing satellite radio companies in the world who has 100% commercial-free music from every genre. The Company announced February 26th the full year and fourth quarter 2007 financial results driven by the highest annual gross subscriber additions in satellite radio history. The Company also reported positive free cash flow for the fourth quarter and for the second half of 2007. The Company offers music from every genre, plus Sports, News, Talk and Comedy with crystal-clear, coast-to-coast coverage.
Mel Karmazin, CEO of SIRIUS stated, “In 2007, SIRIUS achieved our financial goals and solidified our position as one of the fastest growing media companies in the world. Revenue grew 45% to $922.1 million driven by 4.2 million gross subscriber additions – an annual record for satellite radio. More importantly, SIRIUS demonstrated positive operating leverage in the business through solid cost control by limiting growth in total expenses, excluding non-cash items, to under 9% for the year. SIRIUS achieved positive free cash flow for the second half of the year and $75.9 million in positive free cash flow for the fourth quarter 2007.”
Mel Karmazin continued to say, “The pending merger with XM will offer unprecedented choice for consumers and create tremendous value for stockholders. We have made a very strong case for the merger to the government, received broad support from leading organizations and prominent individuals, and we look forward to a fast positive ruling from the government.”
Full Year and Fourth Quarter 2007 Financial Results
SIRIUS ended 2007 with 8,321,785 subscribers, up 38% from 6,024,555 subscribers at the end of 2006. Retail subscribers increased 15% in 2007 to 4,640,709 from 4,041,826 at the end of 2006. OEM subscribers increased 87% in 2007 to 3,665,632 from 1,959,009 at the end of 2006. During the fourth quarter 2007, SIRIUS added 654,309 net subscribers and, according to the NPD Group, SIRIUS achieved a 68% share of aftermarket satellite radio sales, its highest ever.
Total revenue for 2007 increased to $922.1 million, up 45% from 2006’s total revenue of $637.2 million. Fourth quarter 2007 total revenue increased 29% to $249.8 million from fourth quarter 2006 revenue of $193.4 million. Average monthly revenue per subscriber (or “ARPU”) was $10.46 in 2007 and $10.05 for the fourth quarter 2007. Average self-pay monthly churn was 1.6% in 2007 and all-in average monthly churn for 2007 was 2.2%. For the fourth quarter 2007, average self-pay monthly churn was 1.7% and all-in churn was 2.3%. SAC per gross subscriber addition was $101 for 2007 improving 11% over 2006’s SAC per gross subscriber addition of $114. In the fourth quarter 2007, SAC per gross subscriber addition was $90.
SIRIUS reported a net loss of ($565.3) million, or ($0.39) per share, for 2007, an improvement of 49% over the 2006 net loss of ($1.1) billion, or ($0.79) per share. For the fourth quarter 2007 the net loss was ($166.2) million, or ($0.11) per share, as compared with the fourth quarter 2006 net loss of ($245.6) million, or ($0.17) per share.
The adjusted loss from operations for 2007 improved to ($327.4) million, as compared to the adjusted loss from operations of ($513.1) million in 2006. For the fourth quarter 2007, the adjusted loss from operations was ($107.2) million, an improvement of 36% as compared with the ($166.8) million adjusted loss from operations in the fourth quarter 2006.
SIRIUS reported a full-year 2007 free cash flow loss of ($218.6), a 56% improvement over the 2006 free cash flow loss of ($500.7) million. The company posted positive free cash flow in the fourth quarter of 2007 of $75.9 million, up 150% from the $30.4 million in positive free cash flow reported in the fourth quarter of 2006. For the first time in the company’s history, SIRIUS also posted positive free cash flow of $8.1 million for the second half of the year.
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