XM Subs, Revenue Up, Loss Widens For Q1; FTC Launches Probe
April 27, 2006 at 6:13 AM (PT)
XM SATELLITE RADIO HOLDINGS INC. first quarter 2006 net subscriber additions totalled 568,902, giving the service a total of 6,501,859 subscribers, a 72% year-to-year increase in total subscribers. Revenue jumped over 100% to $208 million, driven by subscriber revenue and a price increase. Subscriber acquisition cost dropped from fourth quarter's $89. to $62. (but more than first quarter 2005's $52.). The company's net loss widened from $119.9 to $149.2 million.
"XM delivered solid results on key financial metrics during the first quarter," said XM President/CEO HUGH PANERO in the company's press release. "XM added more than 568,000 new subscribers at efficient subscriber acquisition cost levels. XM is positioned for continued strong growth in 2006 with our outstanding content and the introduction of five new radio models, including our revolutionary XM/MP3 players. With our first quarter subscriber growth, we remain on track to reach nine million subscribers and positive cash flow from operations by year end."
XM also announced that it has received a letter from the FTC indicating that the federal agency is investigating XM's marketing activity, including billing, rebates, and possible telemarketing violations. In addition, the company disclosed that the FCC has ruled DELPHI's SkyFi2 XM receiver's internal FM transmitter is not compliant with the Commission's emission limits.
The company also announced that it had succesfully completed its consent solicitation for its outstanding 14% Senior Secured Discount Notes due 2009, 12% Senior Secured Notes due 2010 and Senior Secured Floating Rate Notes due 2009. Consents from the holders of approximately 59.1% of the outstanding principal amount of the 14% Notes, approximately 99.6% of the outstanding principal amount of the 12% Notes and approximately 90.2% of the outstanding principal amount of the Floating Rate Notes had been received by 5p ET WEDNESDAY (4/26).