Sirius XM Reports First Positive Cash Flow For Year
January 19, 2010 at 3:38 PM (PT)
SIRIUS XM RADIO announced that it picked up a little more than a quarter-million news subscribers in Q4 '09, ended the year with 18,772,758 subscribers. Those numbers were at least partially responsible for the satcaster posting positive cash flow for the first time in its history.
"Based on preliminary financial data, we expect to report over $100 million of free cash flow for 2009, an extraordinary improvement over the pro forma negative free cash flow of $552 million that the company experienced in 2008," CEO MEL KARMAZIN stated. "This is the first year in our history that we have generated positive free cash flow for the entire year. Our fourth-quarter subscriber results mark two consecutive quarters of net subscriber additions for SIRIUS XM and are the highest since the third quarter of 2008. Improvements in automotive sales, conversion rates and better than anticipated self-pay churn suggest that the outlook for the auto sector and the effects of the economy on our business are beginning to improve."
The company also announced that the conversion rate from trial to self-pay subs in the sale of a vehicle in Q4 of 2009 was 46.4%, up from 44.2% in the fourth quarter of 2008, and that self-pay churn was 1.97% for the fourth quarter of 2009. "We expect to meet our guidance and report over $400 million in pro forma adjusted operating income, an improvement of over $500 million from the pro forma adjusted operating income for 2008, and an improvement of nearly $1 billion from the pro forma adjusted operating income for 2007, the last full year prior to the merger of SIRIUS and XM," CFO DAVID FREAR said.