XM Radio Holdings Inc. Financial Results 2004

Discussion in 'Mobile Phones / Entertainment' started by Ronald Epstein, Feb 11, 2005.

  1. Ronald Epstein

    Ronald Epstein Administrator

    Jul 3, 1997
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    Ronald Epstein
    With thanks to XM411.com

    XM Satellite Radio Holdings Inc. Financial Results 2004
    XM Satellite Radio Holdings Inc. Announces Fourth Quarter and Full Year 2004 Results

    Thursday February 10, 8:32 am ET

    XM Adds Over 1.8 Million Net Subscribers In 2004, Ending Year with Over 3.2 Million Subscribers; 2004 Revenue Hit $244 Million, Up 166 Percent over 2003

    # WASHINGTON, Feb. 10 /PRNewswire-FirstCall/ -- XM Satellite Radio Holdings Inc. (Nasdaq: XMSR - News) today reported financial and operating results for the fourth quarter and full year ended December 31, 2004. XM added 1.8 million net subscribers in 2004, an increase of 137 percent over 2003, and finished the year with 3,229,124 subscribers, exceeding 2004 year-end subscriber guidance of 3.1 million by more than 125,000 subscribers.

    During the fourth quarter 2004, XM recorded net subscriber additions of 713,101, representing a 66 percent increase over the 430,580 subscribers added in the fourth quarter 2003. Contributing to XM's rapid subscriber growth was a successful 2004 holiday shopping season, with more than 240,000 subscribers activating service during the last eight days of December, including over 50,000 on Christmas day.

    "XM had an outstanding 2004," said XM President and CEO Hugh Panero. "XM ended the year with more than 3.2 million subscribers, extending our lead over the competition to two million subscribers compared to one million a year ago; Toyota selected XM to provide factory-installed satellite radio and data services in Toyota and Lexus vehicles; XM introduced the MyFi, the first portable, wearable satellite radio and signed a deal with Major League Baseball to broadcast games on XM beginning this spring." Panero continued, "We plan to build on this momentum and execution in 2005 and end the year with 5.5 million subscribers, furthering our market leadership position."

    Fourth Quarter and Full-Year Financial and Operating Results

    For the fourth quarter 2004, XM reported quarterly revenue of $83.1 million, an increase of 148 percent over the $33.5 million reported in fourth quarter 2003. XM's full year 2004 revenue was $244.4 million, an increase of 166 percent over the $91.8 million reported in 2003. These quarterly and annual increases in revenue were driven by significant subscriber growth.

    XM's net loss for the fourth quarter 2004 was ($188.2) million as compared to ($162.9) million in fourth quarter 2003. For the full year 2004, XM's net loss was ($642.4) million, compared to ($584.5) million in 2003, primarily reflecting increased de-leveraging expenses.

    XM reported an EBITDA loss of ($139.7) million for the fourth quarter 2004, including $41.6 million in de-leveraging charges, compared to ($95.5) million for the fourth quarter 2003, which included $4.6 million in de-leveraging charges. For the full year 2004, XM reported an EBITDA loss of ($388.4) million, including $76.6 million in de-leveraging charges, compared to ($318.9) million for the full year of 2003, which included $24.7 million in de-leveraging charges.

    Per Unit Cost to Acquire Each New Subscriber Improves to $100

    The full year 2004 Cost Per Gross Addition (CPGA) was $100, an improvement of 27 percent compared to the full year 2003 CPGA of $137 and better than previous 2004 guidance of $110. XM's CPGA represents the fully-loaded cost to acquire each new subscriber, including Subscriber Acquisition Cost (SAC) of $62 in 2004, plus advertising and marketing expenses.

    XM Adds Major League Baseball

    XM signed a long-term agreement with Major League Baseball (MLB) to broadcast MLB games nationwide beginning with the 2005 season. Later this month, XM will launch the nation's first 24-hour MLB Radio channel called "Home Plate" featuring baseball news, call-in shows, classic games, and other exclusive content. XM has assembled an all-star team of on-air talent for "Home Plate," including baseball veterans Rob Dibble, Kevin Kennedy and Larry Bowa.

    XM Named "2004 Radio Service of the Year" and Adds New Content

    XM Radio was named the "2004 Radio Service of the Year" at the Billboard Digital Entertainment Awards. In 2004 XM also premiered new programming, including "The Bob Edwards Show," which anchors XM Radio's new public radio channel XMPR; the "Opie & Anthony Show;" Starbucks' Hear Music Channel; and college football and basketball games from the ACC, Big Ten and Pac-10 conferences. XM also launched its XM Radio Online Service.

    In January, XM announced new talk programming, including national radio personalities Dr. Laura Schlesinger and G. Gordon Liddy. Both programs are set to debut in mid-February. These talk radio stars join XM's stellar lineup of talk talent that includes Sean Hannity, Al Franken, Michael Reagan, Alan Colmes and Michael Savage.

    XM Partners with Toyota and Nissan and Expands Other OEM Relationships

    In 2004, Toyota selected XM as its supplier for satellite delivered data services for Toyota, Lexus and Scion vehicles. In addition, Toyota will offer XM radios, and XM alone, as a factory-installed feature in Toyota and Lexus vehicles in 2006. Toyota will expand the factory-installed availability of XM's satellite radio and data services to additional Toyota and Lexus models in the future.

    In January 2005, Nissan North America, Inc. chose XM to supply satellite-delivered data and telematics services, such as in-vehicle messaging and XM NavTraffic, based on XM's superior technology. Nissan currently offers XM radios as an accessory option on all 18 models of Nissan and Infiniti vehicles. XM is now the exclusive or preferred provider for data services with General Motors, Honda, Toyota and Nissan, representing approximately 55 percent of the OEM industry.

    General Motors achieved a major milestone in December 2004, signing up its 1 millionth XM subscriber. During the year, GM added Saab to its lineup of vehicles featuring XM and recently announced the availability of XM NavTraffic on certain Cadillac CTS models. In 2005, GM plans to produce more than 1.5 million XM-equipped vehicles. Honda is also aggressively increasing its XM offerings and plans to build more than 400,000 XM-equipped vehicles for the 2005 model year, up from 200,000 vehicles in the 2004 model year. In 2005, Honda is offering XM Radio as factory-installed equipment in twelve models including the all-new and critically acclaimed Honda Accord Hybrid and Ridgeline, its first entry into the truck market.

    XM Introduces First Portable, Wearable Satellite Radio

    In December 2004, XM introduced the MyFi, the world's first portable, wearable satellite radio. The MyFi is the first of a new product line called XM2go. Two new XM2go products will be introduced in 2005. Pioneer Electronics will introduce its "Airware" XM2go satellite radio this spring and Giant International will launch an XM2go product under the all-new "Tao" consumer brand. More than 275,000 XM2go devices have been manufactured to date, and that number is expected to climb in 2005 as Delphi, Pioneer and Giant increase production to meet strong consumer demand.

    XM Unveils "Connect-and-Play" Technology

    At the 2005 Consumer Electronics Show, XM debuted its "Connect-and-Play" technology. This revolutionary technology is designed to integrate XM into a broad range of home electronic and entertainment products. For a very low cost, consumer electronics manufacturers can add the "Connect-and-Play" chip to their consumer electronics products, making any device XM Ready. The new "Connect-and-Play" integrated antenna/receiver, expected to have an MSRP of $49.99, enables any of these XM Ready devices to receive XM without the need for any additional hardware or installation costs. XM has developed alliances with a number of major consumer electronics manufacturers to launch XM Ready products with the "Connect-and-Play" technology in 2005 and 2006. The first "Connect-and-Play" product from Eton will be available in 60 days.

    XM Improves Liquidity and Strengthens Balance Sheet

    As of December 31, 2004, XM's total liquidity position was $853 million including cash, cash equivalents and capacity under the Revolving Credit and Equity Facilities with GM. In January, XM added $100 million in gross proceeds through an over-allotment option on the sale of 1.75 percent Convertible Notes. During 2004, XM was able to opportunistically de-lever its balance sheet and eliminate over $900 million in future interest, dividends, accretion and principal payments. In December 2004, XM was also added to the NASDAQ-100 Index, which lists many of the leading technology companies in the world.
  2. larry thornton

    Feb 24, 2005
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    anybody own stock in XM? i have some in sirius. what do you guys think? i would have bought xm by now but sirius is just much cheaper. i thinkn both will do well in the end


  3. Ronald Epstein

    Ronald Epstein Administrator

    Jul 3, 1997
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    Real Name:
    Ronald Epstein

    I own both XM and SIRIUS stock.

    I bought them both at the wrong time.

    At the end of December both stocks were
    climbing. Each day the stocks kept reaching
    higher and higher. I was looking to ride
    the wave and bought into XM at $40 per share
    and SIRIUS at $7.50.

    Those were the highest either stock ever peaked.

    Immediately following my purchase both
    stocks began to fall. XM is now at about $28
    and SIRIUS is just above $6 (if memory serves
    me correctly).

    I lost money, but in the long run I am not
    worried in the least. Satellite radio is
    hot right now and within the next year I expect
    both stocks to surpass my original purchase price.

    I would think that this would be a good time
    to buy. Furthermore, I think that XM is a
    better purchase. SIRIUS may be at a lower price
    but it is my understanding that because of the
    amount of stock that is out there, the price will
    not climb as quickly.

    I am only an amateur investor so I would certainly
    listen to other opinions before investing your
    hard-earned money.

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