This excerpt taken from the SIRI 8-K filed Jan 26, 2005.
SIRIUS SATELLITE RADIO ANNOUNCES FOURTH QUARTER
Exceeded Year-End Subscriber Target and
Reports More Than 1.24 Million Subscribers Today
|||Revenue Up 419% Over 2003|
|||Costs to Add New Customers Down Significantly|
|||Strong Cash and Low Debt Position Maintained|
Increases 2005 Subscriber Guidance to Over 2.5
NEW YORK January 26, 2005 SIRIUS Satellite Radio (NASDAQ: SIRI) today announced strong fourth quarter and year-end 2004 financial and operating results, driven by better-than-expected subscriber growth.
On December 31, 2004, SIRIUS had 1,143,258 subscribers, beating its year-end target of 1 million, and had over 1.24 million subscribers as of January 24, 2005. The company attributed much of the better-than-expected year-end number to robust holiday sales and an increase in its automotive channel business, driving revenue to $66.9 million, a 419% increase over the previous year.
As a result of a strong start to 2005, the company is raising its 2005 year-end subscriber estimate to over 2.5 million.
The fourth quarter subscriber figure reflects net additions of 480,969 subscribers, a 332% increase from net additions in the fourth quarter of 2003. SIRIUS had 521,479 gross subscriber additions in the fourth quarter of 2004, and reported average monthly churn of 1.6% for the full year 2004, the companys best-reported churn rate to date and below previous guidance. The company reported subscriber acquisition costs (SAC) per gross subscriber addition of $177 for the full year 2004, a significant improvement over $293 for 2003 and well inside 2004 guidance of below $200.
In the fourth quarter of 2004, SIRIUS continued to experience significant gains in the retail market, fueled by strong holiday sales of its products, broader distribution including over 25,000 sales outlets and growing consumer awareness of its brand, plus an increased preference for its superior programming. According to The NPD Group, SIRIUS retail market share reached 51% in November 2004, SIRIUS highest level on record.
During the fourth quarter of 2004, SIRIUS added 348,711 subscribers from its retail channel, a 302% increase from retail additions in the year ago quarter. The company also added 130,881 net subscribers from its automotive, trucking and boating relationships, a 444% increase in net additions from those channels in the year ago quarter.
SIRIUS exclusive automotive partners, DaimlerChrysler and BMW, continue to roll out factory installation programs for SIRIUS Satellite Radio.
Ford recently announced that it plans to include SIRIUS as a factory option in up to 21 models, and expects to generate up to one million SIRIUS subscribers over the next two model years 2006 and 2007.
In December 2004, DaimlerChrysler announced that its factory installations of SIRIUS were on track to produce an estimated 550,000 subscribers over the 2005 and 2006 model years.
2004 was a turning point for SIRIUS, and a strong indicator of what we believe the future holds for a new entertainment category still in its early days, said Mel Karmazin, CEO of SIRIUS. Not only did we greatly exceed our estimated subscriber target for the year, but we also beat estimates in subscriber acquisition costs and monthly churn. The fourth quarter produced blow-out sales, heavily fueled by the holidays, and solid numbers in our automotive channel, which we believe will be a major contributor to our subscriber growth in 2005. Our strong start this year, along with an expanding slate of compelling programming, the introduction of third generation products later this year, and the anticipated arrival of Howard Stern next January, all contribute to our enthusiasm for the growth prospects of SIRIUS.